How trade take place in between a and b in adam smiths world

Reference no: EM13189115

Country A has 1500 units of labor and can produce two goods, manufactures and food.
A's producers take 5 units of labor to produce one unit of manufactures and 6 units to produce one unit of food. Country B has 1800 units of labor and takes 3 units of labor to produce one unit of manufactures and 9 units to produce one unit of food.
Draw the production possibility frontiers for the two countries. Draw the world relative supply curve for manufactures. Would trade take place in between A and B in Adam Smith's world? What good would A export?

Reference no: EM13189115

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