Reference no: EM133268568

In Uzbekistan, 1 bale of cotton can be produced for 20 resources and 1 bushel of wheat can be produced for 40 resources. In neighboring Tajikistan, 1 bale of cotton can be produced for 40 resources and 1 bushel of wheat can be produced for 50 resources.

What is the opportunity cost in bales of cotton for both countries to produce 1 bushel of wheat?

Which country enjoys a comparative advantage in cotton production, why?

Assume that both countries have 800 resources and use half of their resources to produce both cotton and wheat but do not trade. How much cotton and wheat are produced and consumed in each country?

Now assume that Tajikstan devotes all of its resources to producing wheat and Uzbekistan devotes 3/4 of its resources to producing cotton and the remaining quarter to producing wheat. How much wheat and cotton are produced in both countries?

A trade deal is worked out where Uzbekistan will exchange 10 bales of cotton for 6 bushels of wheat from Tajikistan. How much cotton and wheat are consumed in both countries?

Describe the gains from trade.

After doing some research online describe one real-world example of a good that a country enjoys a comparative advantage in producing, with its major trading partners or most of the world, and why.