Assuming TOT (terms of trade) Px/Py is 0.75, which country will gain more from free trade and why? Hours of Labor Required to produce X and YCountry ACountry BGood X1512Good Y3010

A will get 1 unit of X and will sell it for PX and will buy PX/PY units of Y i.e. 0.75 units of Y. B…

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Assuming TOT (terms of trade) Px/Py is 0.75, which country will gain more from free trade and why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Assuming TOT (terms of trade) Px/Py is 0.75, which country will gain more from free trade and why?

Hours of Labor Required to produce X and Y
Country A
Country B
Good X
15
12
Good Y
30
10

Definition Definition Any of the various net benefits or net gains that a country or trader makes by participating in international trade.

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