CountryA --- 2 Wheat(Units) or 10 Bananas(Units)
CountryB --- 3 Wheat(Units) or 9 Bananas(Units)
a) Explain which good Country A will export.
b) Suppose the two countries trade with each other and the terms of trade are 1 unit of wheat for 4 units of bananas. Calculate Country A's gains from trade (in terms of bananas) for 1 unit of goods exported.
International Trade
2006-12-05 7:48 am
回答 (1)
2006-12-05 8:08 am
✔ 最佳答案
The cost of country A produce 1 Wheat : 5 bananaThe cost of country A produce 1banana : 0.2 Wheat
The cost of country B produce 1 Wheat : 3 banana
The cost of country B produce 1banana : 0.33 Wheat
a. Counrty A will export banana
b. Country A's gain of trade : $0.25 - $0.2=0.05
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