Consider a hypothetical world with two countries: Country A and Country B. Both countries produce computers and televisions. Assume that consumers in both countries desire both these goods and that consumers and producers cannot differentiate between computers and televisions from either country. The production in each country before trade is shown in the table below. Production before trade: Country Computer Production Television Production Country A 3,000 1,800 Country B 1,200 1,000 Total 4,200 2,800 Suppose that each country transfers some amount of resources toward its area of comparative advantage. The production in each country after the countries started trade is as follows: Production after Trade Country Computer Production Television Production Country A 4,000 1,200 Country B 600 2,000 Total 4,600 3,200 Determine the range for the quantity of computers exchanged for televisions that will benefit both countries. Note that a country will benefit from trade if it can consume more than in a world without trade. Enter your answers in the boxes below. Greater Than Lower Than
Consider a hypothetical world with two countries: Country A and Country B. Both countries produce computers and televisions. Assume that consumers in both countries desire both these goods and that consumers and producers cannot differentiate between computers and televisions from either country. The production in each country before trade is shown in the table below. Production before trade: Country Computer Production Television Production Country A 3,000 1,800 Country B 1,200 1,000 Total 4,200 2,800 Suppose that each country transfers some amount of resources toward its area of comparative advantage. The production in each country after the countries started trade is as follows: Production after Trade Country Computer Production Television Production Country A 4,000 1,200 Country B 600 2,000 Total 4,600 3,200 Determine the range for the quantity of computers exchanged for televisions that will benefit both countries. Note that a country will benefit from trade if it can consume more than in a world without trade. Enter your answers in the boxes below. Greater Than Lower Than
Chapter34: World Trade Equilibrium
Section: Chapter Questions
Problem 5E
Related questions
Question
Consider a hypothetical world with two countries: Country A and Country B. Both countries produce computers and televisions. Assume that consumers in both countries desire both these goods and that consumers and producers cannot differentiate between computers and televisions from either country. The production in each country before trade is shown in the table below.
Production before trade:
| Country | Computer Production | Television Production |
|---|---|---|
| Country A | 3,000 | 1,800 |
| Country B | 1,200 | 1,000 |
| Total | 4,200 | 2,800 |
Suppose that each country transfers some amount of resources toward its area of
Production after Trade
| Country | Computer Production | Television Production |
|---|---|---|
| Country A | 4,000 | 1,200 |
| Country B | 600 | 2,000 |
| Total | 4,600 | 3,200 |
Determine the range for the quantity of computers exchanged for televisions that will benefit both countries. Note that a country will benefit from trade if it can consume more than in a world without trade. Enter your answers in the boxes below.
Greater Than
Lower Than
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