The world relative demand curve of books (RD) is shown below. Using the information of the world relative supply schedule of books above, draw a world relative supply curve of books below.

Use the diagram of world relative demand and supply curves of books above to answer the following questions.

How much is an equilibrium relative price of book (PBook/PT-shirt)? How much is an equilibrium relative quantity of book (QBook/QT-shirt)?

At the world equilibrium, how many units of Book are produced? How many units of T-shirts are produced?

At the world equilibrium, which country produce Book, Aggieland or Spartan? Which country produce T- shirts?

 

There two countries: Aggieland and Spartan. Each country produces two products, books and T-shirts, by using its own labor resources, where each country has 5,000 labor hours. . The tables below show the production possibilities of each country. Aggieland Book Spartan T-shirts Book T-shirts Production Production Production Production 0. 15,000 10,000 8,000 6,000 1,000 12,000 2,000 2,000 3,000 9,000 6,000 4,000 6,000 8,000 4,000 4,000 3,000 2,000 5,000 10,000