Table 5 shows the current output levels of Wool and Cotton for Australia and New Zealand. Table 5. Output per year Using the data from Table 5, (a) (b) Australia New Zealand (c) Wool (million tons) 14 22 Cotton (million tons) 24 10 Calculate Australia's opportunity cost of producing one ton of a. Wool b. Cotton Calculate New Zealand's opportunity cost of producing one a. Wool b. Cotton If both countries intend to specialise and trade, explain which country should specialise in producing wool and which country should specialise in producing cotton; and show how both countries can benefit from trade.

Table 5 shows the current output levels of Wool and Cotton for Australia and New Zealand. Table 5. Output per year Using the data from Table 5, (a) (b) Australia New Zealand (c) Wool (million tons) 14 22 Cotton (million tons) 24 10 Calculate Australia's opportunity cost of producing one ton of a. Wool b. Cotton Calculate New Zealand's opportunity cost of producing one a. Wool b. Cotton If both countries intend to specialise and trade, explain which country should specialise in producing wool and which country should specialise in producing cotton; and show how both countries can benefit from trade.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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