The Power of Trade and Comparative Advantage: Work It Out 7
Here's another specialization and...
Business, 19.03.2020 17:32, GingerSnaps
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:
Number of Hours to Make One Rotid Number of Hours to Make One Tauron
Mandovia 100 50
Ducennia 150 200
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?
Answers: 2
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