Trade at Negotiated Mid-Price. This problem illustrates an example of trade induced by comparative advantage assumes that China and France each have 1,000 production units. With one unit of production (a mix of land, labor, capital, and technology), China can produce either 12 containers of toys or 8 cases of wine France can produce either 2 cases of toys or 8 cases of wine. Thus, a production unit in China is six times as efficient compared to France when producing toys, but equally efficient when producing wine. Assume at first that no trade takes place. China allocates 800 production units to building toys and 200 production units to producing wine France allocates 200 production units to building toys and 800 production units to producing wine a. What is the production and consumption of China and France without trade? b. Assume complete specialization, where China produces only toys and France produces only wine What would be the effect on total production? c. The mid-price for exchange between France and China can be calculated as follows. The mid-price for the number of containers of toys per case of wine is (12 containers + 2 containers) - 2-7 containers of toys per 8 cases of wine What happens to total production and consumption? (Click on the icon to import the table into a spreadsheet.) DB Wine (Cases/Unit) 8 Assumptions China-output per unit of production input France-output per unit of production input China-total production inputs France-total production inputs Toys (Containers/Unit) 12 2 1,000 1,000 8 a. What is the production and consumption of China and France without trade? Calculate the production and consumption of China and France without trade below (Round to the nearest integer) Production if there is no trade Toys Wine CHINA Allocated production units to Produces and consumes (output per unit x units allocated) FRANCE Allocated production units to Produces and consumes (output per unit x units allocated) Total production and consumption across both countries Trade at Negotiated Mid-Price. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1,000 production units with one unit of production (a mix of land, labor capital, and technology), China can produce either 12 containers of toys or 8 cases of wine France can produce either 2 cases of toys or 8 cases of wine. Thus, a production unit in China is six times as efficient compared to France when producing toys, but equally efficient when producing wine Assume at first that no trade takes place. China allocates 800 production units to building toys and 200 production units to producing wine France allocates 200 production units to building toys and 800 production units to producing wine a. What is the production and consumption of China and France without trade? b. Assume complete specialization, where China produces only toys and France produces only wine. What would be the effect on total production? c. The mid-price for exchange between France and China can be calculated as follows The mid-price for the number of containers of toys per case of wine is (12 containers + 2 containers) - 2=7 containers of toys per 8 cases of wine Wisat happens to total production and consumption? (Click on the icon to import the table into a spreadsheet.) Wine (Cases/Unit) 8 Toys (Containers/Unit) 12 2. 1,000 1,000 Assumptions China-output per unit of production input France-output per unit of production input China-total production inputs France-total production inputs 8 b. Assume complete specialization where China produces only toys and France produces only wine Calculate the production and consumption of China and France with complete specialization below. (Round to the nearest integer) Toys Wine Production if there is complete specialization CHINA Allocated production units to Produces and consumes (output per unit x units allocated) FRANCE Allocated production units to Produces and consumes (output per unit x units allocated) Total production and consumption across both countries Trade at Negotiated Mid-Price. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1,000 production units. With one unit of production (a mix of land, labor, capital and technology), China can produce either 12 containers of toys or 8 cases of wine France can produce either 2 cases of toys or 8 cases of wine. Thus, a production unit in China is six times as efficient compared to France when producing toys, but equally efficient when producing wine. Assume at first that no trade takes place. China allocates 800 production units to building toys and 200 production units to producing wine France allocates 200 production units to building toys and 800 production units to producing wine a. What is the production and consumption of China and France without trade? b. Assume complete specialization, where China produces only toys and France produces only wine. What would be the effect on total production? c. The mid-price for exchange between France and China can be calculated as follows. The mid-price for the number of containers of toys per case of wine is (12 containers + 2 containers) - 2 = 7 containers of toys per 8 cases of wine What happens to total production and consumption? (Click on the icon to import the table into a spreadsheet) Wine (Cases/Unit) 8 Toys (Containers/Unit) 12 2 1,000 1,000 Assumptions China-output per unit of production input France-output per unit of production input China-total production inputs France-total production inputs 8 What would be the effect on total production? (Select the best choice below.) O A. The combined production of both countries is 12,000 containers of wine, 2,000 more containers of wine than before specialization, with toys production remaining unchanged OB. The combined production of both countries is 12,000 containers of toys, 2,000 more containers of toys than before specialization, with wine production remaining unchanged O C. The combined production of both countries is 12,000 containers of wine, 2,000 fewer containers of wine than before specialization, with toys production remaining unchanged. OD. The combined production of both countries is 12,000 containers of toys, 2,000 fewer containers of toys than before specialization, with wine production remaining unchanged 7 containers of toys per & cases of wine What happens to Trade at Negotiated Mid-Price. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1,000 production units. With one unit of production (a mix of land, labor, capital and technology), China can produce either 12 containers of toys or 8 cases of wine France can produce either 2 cases of toys or 8 cases of wine. Thus, a production unit in China is six times as efficient compared to France when producing toys, but equally efficient when producing wine. Assume at first that no trade takes place. China allocates 800 production units to building toys and 200 production units to producing wine, France allocates 200 production units to building toys and 800 production units to producing wine a. What is the production and consumption of China and France without trade? b. Assume complete specialization, where China produces only toys and France produces only wine What would be the effect on total production? c. The mid-price for exchange between France and China can be calculated as follows. The mid-price for the number of containers of toys per case of wine is (12 containers + 2 containers) + 2 = 7 containers of toys per 8 cases of wine What happens to total production and consumption? (Click on the icon to import the table into a spreadsheet.) Assumptions China-output per unit of production input France-output per unit of production input China-total production inputs France-total production inputs Toys (Containers/Unit) 12 2 1,000 1,000 Wine (Cases/Unit) 8 8 c. The mid-price for exchange between France and China can be calculated as follows. The mid-price for the number of containers of toys per case of wine is (12 containers + 2 containers) + 2 = 7 containers of toys per 8 cases of wine What happens to total production and consumption? Wine (Cases/Unit) 8 ssumptions China-output per unit of production input France output per unit of production input China-total production inputs France-total production inputs Toys (Containers/Unit) 12. 2 1,000 1,000 8 Trade at Negotiated Mid-Price. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1,000 production units with one unit of production (a mix of land, labor, capital, and technology), China can produce either 12 containers of toys or 8 cases of wine France can produce either 2 cases of toys or 8 cases of wine Thus, a production unit in China is six times as efficient compared to France when producing toys, but equally efficient when producing wine. Assume at first that no trade takes place China allocates 800 production units to building toys and 200 production units to producing wine, France allocates 200 production units to building toys and 800 production units to producing wine a. What is the production and consumption of China and France without trade? b. Assume complete specialization, where China produces only toys and France produces only wine. What would be the effect on total production? c. The mid-price for exchange between France and China can be calculated as follows. The mid-price for the number of containers of toys per case of wine is (12 containers + 2 containers) - 2 = 7 containers of toys per 8 cases of wine What happens to total production and consumption? (Click on the icon to import the table into a spreadsheet.) Wine (Cases/Unit) 8 Toys (Containers/Unit) 12 2 1,000 1,000 Assumptions China-output per unit of production input France-output per unit of production input China-total production inputs France-total production inputs 8 Calculate the total production and consumption across both countries for toys below (Round to the nearest integer.) Domestic TOYS Exports (-) Imports (+) Production Trade at Negotiated Mid-Price (7 toys = 8 wine) Consumption CHINA Allocated production units to Produces and consumes (output per unit x units allocated) FRANCE Allocated production units to Produces and consumes (output per unit x units allocated) Total production and consumption across both countries Trade at Negotiated Mid-Price. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1,000 production units with one unit of production (a mix of land, labor, capital, and technology). China can produce either 12 containers of toys or 8 cases of wine France can produce either 2 cases of toys or 8 cases of wine. Thus, a production unit in China is six times as efficient compared to France when producing toys, but equally efficient when producing wine Assume at first that no trade takes place. China allocates 800 production units to building toys and 200 production units to producing wine France allocates 200 production units to building toys and 800 production units to producing wine a. What is the production and consumption of China and France without trade? b. Assume complete specialization, where China produces only toys and France produces only wine. What would be the effect on total production? c. The mid-price for exchange between France and China can be calculated as follows. The mid-price for the number of containers of toys per case of wine is (12 containers + 2 containers) - 2 = 7 containers of toys per 8 cases of wine What happens to total production and consumption? (Click on the icon to import the table into a spreadsheet) Toys (Containers/Unit) 12 2 1,000 1,000 Wine (Cases/Unit) 8 8 Assumptions China-output per unit of production input France-output per unit of production input China-total production inputs France-total production inputs Calculate the total production and consumption across both countries for toys below (Round to the nearest integer) WINE Exports (-) Domestic Consumption Production Imports (+) Trade at Negotiated Mid-Price (7 toys = 8 wine) CHINA Allocated production units to Produces and consumes (output per unit x units allocated) FRANCE Allocated production units to Produces and consumes (output per unit x units allocated) Total production and consumption across both countries Trade at Negotiated Mid-Price. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1,000 production units. With one unit of production (a mix of land labor, capital and technology), China can produce either 12 containers of toys or 8 cases of wine France can produce either 2 cases of toys or 8 cases of wine. Thus, a production unit in China is six times as efficient compared to France when producing toys, but equally efficient when producing wine. Assume at first that no trade takes place China allocates 800 production units to building toys and 200 production units to producing wine, France allocates 200 production units to building toys and 800 production units to producing wine a. What is the production and consumption of China and France without trade? b. Assume complete specialization, where China produces only toys and France produces only wine What would be the effect on total production? c. The mid-price for exchange between France and China can be calculated as follows. The mid-price for the number of containers of toys per case of wine is (12 containers + 2 containers) - 2 = 7 containers of toys per 8 cases of wine. What happens to total production and consumption? (Click on the icon to import the table into a spreadsheet.) Wine (Cases/Unit) 8. 8 Toys Assumptions (Containers/Unit) China-output per unit of production input 12 France-output per unit of production input 2. China-total production inputs 1,000 Francetotal production inputs 1,000 Allocated producuori us to Produces and consumes (output per unit x units allocated) FRANCE Allocated production units to Produces and consumes (output per unit x units allocated) Total production and consumption across both countries What happens to total production and consumption? (Select all the choices that apply) A. China gains 1,000 more containers of toys (10,600 post-trade compared to 9,600 pre-trade), and enjoys the same level of wine consumption (1600) B. France gains 1,000 more containers of toys (1,400 post-trade compared to 400 pre-trade), and enjoys the same level of wine consumption (6,400) C. Wine production therefore remains the same as before trade, but now the 2.000 decreased production of toys is split evenly between the two countries D. Wine production therefore remains the same as before trade, but now the 2,000 increased production of toys is split evenly between the two countries