Which country would benefit from the trade explain

Assignment Help Microeconomics

Reference no: EM13749218

Suppose that in a year an American worker can produce 100 shirts or 20 computers, while a Chinese worker can produce 100 shirts or 10 computers.

a. If the two countries were open to trade, which country would export shirts? Give a specific numerical example. Which country would benefit from the trade? Explain.

b. Explain what price of computers (in terms of shirts) the two countries might trade.

c. Suppose that China catches up with American productivity so that a Chinese worker can produce 100 shirts or 20 computers. What pattern of trade would you predict now? How does this advance in Chinese productivity affect the economic well-being of the citizens of the two countries?

Reference no: EM13749218

Questions Cloud

Beth corbins regular hourly wage rate : Beth Corbin’s regular hourly wage rate is $20, and she receives an hourly rate of $30 for work in excess of 40 hours. During a January pay period, Beth works 46 hours. Beth’s federal income tax withholding is $95.00, and she has no voluntary deductio..

Should african-americans receive reparations for injustices : Should African-Americans receive reparations for the injustices of slavery? Why or why not? When considering this question, you may find it useful to refer back to the material.

Management of current assets and current liabilities : The management of current assets and current liabilities in the short run can lead to several challenges for the financial manager. What are some of the more common challenges or problems encountered by the firm in this regard, and what are the p..

Calculate the amount of income tax expense : ABC Company employs a periodic inventory system and sells its inventory to customers for $25 per unit. ABC Company had the following inventory information available for the month of May:

Which country would benefit from the trade explain : Suppose that in a year an American worker can produce 100 shirts or 20 computers, while a Chinese worker can produce 100 shirts or 10 computers.a. If the two countries were open to trade, which country would export shirts? Give a specific numerical e..

Idea for a new business and conduct a feasibility analysis : Develop an idea for a new business and conduct a feasibility analysis. Please be as creative as you like in the development of your idea (but as careful as you can be in your analysis of that idea).

The equivalent units of production for materials : Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method to account for units and ..

Interest differentials and forward discount or premium : 1. What is the relationship between interest differentials and forward discount or premium? 2. Is the forward rate an unbiased predictor of the future spot exchange rate?

User Account

All Pages