This topic contains a solution. Click here to go to the answer

Author Question: Suppose the production possibilities for two countries, producing either food or clothing, are shown ... (Read 464 times)

codyclark

  • Hero Member
  • *****
  • Posts: 538


Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. They can each produce any linear combination as well. Assuming free trade between these two countries, Canada will produce food
◦ as long as people are willing to give up more than 1/2 unit of clothing to get a unit of food.
◦ as long as any positive amount of food is demanded.
◦ as long as people are willing to give up at least 1 unit of clothing to get a unit of food.
◦ as long as more than 10 units of food are demanded.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

tdewitt

  • Sr. Member
  • ****
  • Posts: 318
as long as people are willing to give up at least 1 unit of clothing to get a unit of food.



CQXA

  • Hero Member
  • *****
  • Posts: 546


Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. They can each produce any linear combination as well. If production occurs at the kink on the joint production possibility frontier,
◦ the U.S. will specialize in clothing and Canada will specialize in food.
◦ joint output is minimized.
◦ the U.S. will specialize in food and Canada will specialize in clothing.
◦ each country will devote half of its resources to each industry.



Li Jun

  • Sr. Member
  • ****
  • Posts: 335
the U.S. will specialize in food and Canada will specialize in clothing.





iveyjurea

  • Hero Member
  • *****
  • Posts: 555


Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. They can each produce any linear combination as well. Suppose each country is in competitive equilibrium prior to free trade being allowed. Once free trade is allowed, the price of food will be
◦ one-half the price of clothing.
◦ two times the price of clothing.
◦ equal to the price of clothing.
◦ somewhere between one-half the price of clothing and the price of clothing, depending upon the relative bargaining power of the two countries.



epscape

  • Sr. Member
  • ****
  • Posts: 335
somewhere between one-half the price of clothing and the price of clothing, depending upon the relative bargaining power of the two countries.



meagbuch

  • Hero Member
  • *****
  • Posts: 568


Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. They can each produce any linear combination as well. Once free trade is allowed, Canada will produce
◦ no clothing.
◦ 20 units of clothing.
◦ 5 units of clothing.
◦ 10 units of clothing.




 

Did you know?

Though “Krazy Glue” or “Super Glue” has the ability to seal small wounds, it is not recommended for this purpose since it contains many substances that should not enter the body through the skin, and may be harmful.

Did you know?

Oliver Wendell Holmes is credited with introducing the words "anesthesia" and "anesthetic" into the English language in 1846.

Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

The top five reasons that children stay home from school are as follows: colds, stomach flu (gastroenteritis), ear infection (otitis media), pink eye (conjunctivitis), and sore throat.

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

For a complete list of videos, visit our video library