Two countries, Pakistan and India, produce two commodities: apples and mangoes. The amount of each commodity produced per hour, in kg, for Pakistan is: 6 apples, and 6 mangoes. Meanwhile, it is 5 apples and 4 mangoes for India. a.) Suppose that apples and mangoes are exchanged internationally at a rate of 0.9 mangoes per apple. Which country will export apples and why? Assuming both countries have 180 hours of labour each, draw the PPFs of both nations to illustrate the answer, and explain why both countries are better off after the trade.
Two countries, Pakistan and India, produce two commodities: apples and mangoes. The amount of each commodity produced per hour, in kg, for Pakistan is: 6 apples, and 6 mangoes. Meanwhile, it is 5 apples and 4 mangoes for India. a.) Suppose that apples and mangoes are exchanged internationally at a rate of 0.9 mangoes per apple. Which country will export apples and why? Assuming both countries have 180 hours of labour each, draw the PPFs of both nations to illustrate the answer, and explain why both countries are better off after the trade.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter33: International Trade
Section33.1: International Trade Theory
Problem 1ST
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Two countries, Pakistan and India, produce two commodities: apples and mangoes. The amount of each commodity produced per hour, in kg, for Pakistan is: 6 apples, and 6 mangoes. Meanwhile, it is 5 apples and 4 mangoes for India.
a.) Suppose that apples and mangoes are exchanged internationally at a rate of 0.9 mangoes per apple. Which country will export apples and why? Assuming both countries have 180 hours of labour each, draw the PPFs of both nations to illustrate the answer, and explain why both countries are better off after the trade.
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