Question
The Case: Maydupnayme exists in a world where there are only 2 countries, Maydupname and one other. Maydupnayme can produce 1 car using the same
The Case:
Maydupnayme exists in a world where there are only 2 countries, Maydupname and
one other.
Maydupnayme can produce 1 car using the same amount of resources and time as it
takes to produce 3 computers.
The other country can produce 1 car using the same amount of resources and time as it
takes to produce 2 computers.
Cars are worth 2.5 times as much as computers
Both countries can trade with each other with no trade barriers
4)
How would the production decisions of Maydupnayme change if the other country
suddenly decided it no longer wanted to trade? [A, C]
5)
If a natural disaster struck the other country and destroyed many of their car
factories, slowing down production, how may trade be affected between the two
countries? When would the
two countries'
production decisions change? [T, C]
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