Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose there exist two imaginary countries, Sequoia and Glacier. Their labor forces are each capable of supplying four million hours per week that can be

Suppose there exist two imaginary countries, Sequoia and Glacier. Their labor forces are each capable of supplying four million hours per week that can be used to produce chinos, pistachios, or some combination of the two. The following table shows the amount of chinos or pistachios that can be produced by one hour of labor. Country Chinos Pistachios (Pairs per hour of labor) (Pounds per hour of labor) Sequoia 4 16 Glacier 5 10 Suppose that initially Glacier uses 1 million hours of labor per week to produce chinos and 3 million hours per week to produce pistachios, while Sequoia uses 3 million hours of labor per week to produce chinos and 1 million hours per week to produce pistachios. As a result, Sequoia produces 12 million pairs of chinos and 16 million pounds of pistachios, and Glacier produces 5 million pairs of chinos and 30 million pounds of pistachios. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of chinos and pistachios it produces.

image text in transcribedimage text in transcribedimage text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental Markets A Property Rights Approach

Authors: Terry L Anderson, Gary D Libecap

1st Edition

0521279658, 9780521279659

More Books

Students also viewed these Economics questions

Question

8. What are the costs of collecting the information?

Answered: 1 week ago