Which country has a comparative advantage in wheat

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Question 1. Given the following data on the U.S and China: The U.S is endowed with 30 units of labor that will be used to produce wheat and textiles. Its marginal product of labor in the wheat industry is 4 and its marginal product of labor in the textile industry is 2 China is endowed with 80 units of labor whose marginal product in the wheat industry is

Question 2 and its marginal product in the clothing industry is

Question 3. a) Draw the PPF for each country b) Use the midpoint on the PPF to represent the autarky position for each country c) Which country has a comparative advantage in wheat? d) What is the pattern of trade? e) What are the terms of trade for wheat? f) Arbitrarily select a single world price for wheat and draw the CPL (consumption possibility line) for the U,S.? g) Use an equation you learned in class to determine the level of wages in both industries and in both countries?

Reference no: EM133551230

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