Suppose the U.S. can produce 10 units of food and five units of clothing (or any linear combination) and Canada can produce six units of food and three units of clothing (or any linear combination)
What type of trade will occur between these two countries? Explain.
In both countries, two units of food must be sacrificed to produce a unit of clothing. Since each country has the same MRT, there are no gains from trade to be made.
You might also like to view...
What are the key characteristics of the agrarian system in Asia that distinguish it from that of Latin America? Explain your answer
What will be an ideal response?
Suppose there is a single market maker in this market. What is the optimal bid-ask spread?
a. $6 bid; $12 ask b. $7 bid; $11 ask c. $8 bid; $10 ask d. $9 bid; $9 ask
The problem of political instability has been greatest in which continent?
A. South America B. Europe C. Asia D. Africa
At the Pampered Pet Salon the marginal products of the first, second, and third workers are 20, 16, and 10 dogs washed, respectively. The total product (number of dogs washed) of the three worker is
A. 15.33. B. 30. C. 46. D. 138.