The Power Of Trade And Comparative Advantage Work It Out 7 Here S Another Specialization And Exchange Problem This Pro 1 (39.32 KiB) Viewed 17 times
The Power Of Trade And Comparative Advantage Work It Out 7 Here S Another Specialization And Exchange Problem This Pro 2 (21.87 KiB) Viewed 17 times
The Power of Trade and Comparative Advantage: Work It Out 7 Here's another specialization and exchange problem. This problem is wholly made-up, so that you won't be able to use your intuition about the names of countries or the products to figure out the answer. Consider the following productivity table: Mandovia Ducennia Number of Hours to Make One Rotid 50 150 f. This time, the trade negotiations turn out differently: It's two rotids for one tauron. Have the correct country ship 10 million. rotids, have the other send 5 million taurons, and fill in the numbers. Are both countries better off than if there were no trade? Which country likes this trade deal better than the deal from part e? Consumption of rotids for Mandovia: Total rotid consumption: 5000000 Incorrect 150000000 Number of Hours to Make One Tauron 100 200 Consumption of rotids for Ducennia: 145000000 Incorrect
Consumption of taurons for Mandovia: Total tauron consumption: Both countries goods without any trade. Incorrect are not 100000000 90000000 Incorrect Consumption of taurons for Ducennia: 10000000 better off than when there was no trade: Ducennia - likes these prices better than the first set of prices. Incorrect Mandovia could have the same combination of
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