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the answers that i filled in are not all correct. please help Consider two neighboring island countries called Euphoria and Arcadia. They each have 4
the answers that i filled in are not all correct. please help
Consider two neighboring island countries called Euphoria and Arcadia. They each have 4 million labor hours available per month that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of laboc. Initially, Auppose Aresdia uses 1 million hours of labor per month to produce rye and 3 million hours per month to produce jeani, while fuphoria uses 3 milion hours of labor per menth to produce rye and 1 mililon hours per month to produce jearis. Consequently, Fupharia praduces 12 million bushels of rye and 16 million pairs of jeans, and Arcada produces 6 million bushels of rye and 36 milion pairs of jeans. Assume there are no other countries Wiling to trade goods, so, in the absence of trade between these two countries; each country consumes the amount of rye and jeans it produces. Euphoria's opportunity cost of producing 1 bushel of rye is of jeans, and Arced a's opportunity cost of producing 1 bushel of rye is of feans, Therefore, has a comparative advantage in the production of rye, and has a comparative advantage in the production of jeans: Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing anly thet good. In this case, the country that produces rye will produce milson busheis per month, and the country that produces jeans wil produce million pairs per manth. In the following table, enter each country's production dectsion on the third row of the table (marked "Production?). Suppose the country that preduces rye trades 14 milion bushels of rye to the other country in exchange for 42 millien palrs of Jeans: In the folfowing table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Actian, "and enter each country's final consumpbion of each good on the line marked 'consumption." When the two countries did not specielize, the total productior of rye was 18 million busheis per month, and the total production of jeans was 52 mision, pairs per month, Because of specialization, the total production of rye has increased by mililion busheis per month, and the total production of jeans has increased by malion poirs per month. Because the two countries preduce mare rye and more jeans under specialization, each country is obie te-gain from trade. Caiculate the gaint from trade -that is, the amownt by which edch country hos increased its conaumption of aach good reiative to the firs raw af the table, th the fellowing table; encer this difference in the boxes doross the lasf rew (marked "inchease in Contumption"). production of jeans has increased by miFion pairs per month. Because the twe countries produce more rye and more jeans under specialization, each country is able to gain from trade. Calculate the gains fram trade - that its, the amount by which each country has increased its consumption of each gaod relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marived "fnerease in Consumptian") Step by Step Solution
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