22. Refer to the above tables. In Latalia the domestic real cost of 1 ton of por

Question

22. Refer to the above tables. In Latalia the domestic real cost of 1 ton of pork:
A. is 3 tons of beans.
B. diminishes with the level of pork production.
C. is 5 tons of beans.
D. is 1/5of a ton of beans.

24. Refer to the above tables. 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, the total gains from specialization and trade will be:
A. 4 tons of beans.
B. 1 ton of pork and 2 tons of beans.
C. 4 tons of pork.
D. 2 tons of pork and 4 tons of beans.

25. Refer to the above tables. Which of the following would be feasible terms for trade between Latalia and Trombonia?

A. 1 ton of beans for 1 ton of pork
B. 2 tons of beans for 1 ton of pork
C. 6 tons of beans for 1 ton of pork
D. 4 tons of beans for 1 ton of pork

can someone explain how they got those answers thank you!

Latalia's Production Possibilities A B C D E Pork (Tons) 4 3 2 1 0 Beans(Tons) 0 5 10 15 20 Trombonla's Production Possibilities A B C D E Pork(Tons) 8 6 4 2 0 Beans(Tons) 0 6 12 18 24

Explanation / Answer

22. consider latalia, specially the combination A and E, in these two cobinations it produces only one good, it means the value given by 4tons of pork is same as 20 tons of beans, let price of pork = x, beans = y, 4x = 20y, this implies, x= 5y i.e price of 1 ton of pork is 5 times the price of beans.

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