Question
Suppose that there are two countries, A and B, and two goods, X and Y. Country A produces 10 units of X and 20 units
Suppose that there are two countries, A and B, and two goods, X and Y. Country A produces 10 units of X and 20 units of Y per hour, while country B produces 15 units of X and 15 units of Y per hour. The opportunity cost of producing one unit of X in country A is 2 units of Y, and the opportunity cost of producing one unit of X in country B is 1 unit of Y. Find the terms of trade that would be acceptable to both countries.
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Macroeconomics
Authors: Stephen d. Williamson
5th Canadian edition
133847144, 9780134604794 , 978-0133847147
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