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The table below shows how many video games or digital cameras can be produced daily by one worker in Atlantica and Pacifica. Video Games Digital
The table below shows how many video games or digital cameras can be produced daily by one worker in Atlantica and Pacifica. Video Games Digital Cameras Atlantica 10 6 Pacifica 12 3 a. Pacifica is more efficient at producing games and Atlantica v is more efficient at producing cameras. Enter your responses for opportunity costs and terms of trade, below, rounded to 2 decimal places. b. In Atlantica the opportunity cost of 1 camera is games and the opportunity cost of 1 game is Cameras. In Pacifica the opportunity cost of 1 camera is games and the opportunity cost of 1 game is cameras. c. On the basis of absolute advantage Pacifica should specialize in the production of games and Atlantica should specialize in the production of cameras. d. The terms of trade for these two goods must be somewhere between 1 camera traded for games in Atlantica and 1 camera traded for games in Pacifica. e. Suppose there are 3 million workers in Atlantica and 4 million workers in Pacifica. Before trade half of each country's labour force makes each good. As a result of specialization and trade there is a gain in the two countries' output of both products with a million more cameras and million more games
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