International Trade What is the opportunity cost of 1 ton of beans in Latalia? W

Question

International Trade What is the opportunity cost of 1 ton of beans in Latalia? What is the opportunity cost in Trombonia? What is the opportunity cost of 1 ton of pork in Latalia? What is the opportunity cost in Trombonia? If these two countries specialize on the basis of comparative advantage, which country will produce pork and which country will produce beans? Assume that before specialization and trade, Latalia produced combination C and Trombonia produced combination B. If these two nations now specialize completely based on comparative advantage, what are the total gains from specialization and trade? (i.e. How many more tons of pork and/or beans are produced after the two countries trade?)

Explanation / Answer

(a) 0.2 ton of pork is opportunity cost of beans in Latalia, In Trombonia it is 0.33 tons of pork

(b) 5 ton of beans is opportunity cost of pork in Latalia, In Trombonia it is 3 tons of beans

(c) Trombonia - pork, Latalia - beans

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.