2. The following are production possibilities tables for China and the United States. Assume that before specialization and trade the optimal product-mix for China is alternative B and for the United States alternative U. Production Possibilities: ChinaProductABCDEFApparel150,000120,00090,00060,00030,0000Chemicals (in Tons)0306090120150 Production Possibilities: United StatesProductRSTUVWApparel50,00040,00030,00020,00010,0000Chemicals (in Tons)020406080100c. What are the limits of the terms of trade?Limits of the terms of trade = 1,000 units of apparel for____ ton of chemicals and 1,000 units of apparel for_____ tons of chemicals.

An optimal mix boosts the potential unit deals while keeping up with - or preferably improving - the…

Answered: 2. The following are production…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 1QCMC

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2. The following are production possibilities tables for China and the United States. Assume that before specialization and trade the optimal product-mix for China is alternative B and for the United States alternative U.

Production Possibilities: China
Product	A	B	C	D	E	F
Apparel	150,000	120,000	90,000	60,000	30,000	0
Chemicals (in Tons)	0	30	60	90	120	150

Production Possibilities: United States
Product	R	S	T	U	V	W
Apparel	50,000	40,000	30,000	20,000	10,000	0
Chemicals (in Tons)	0	20	40	60	80	100

c. What are the limits of the terms of trade?

Limits of the terms of trade = 1,000 units of apparel for____ ton of chemicals and 1,000 units of apparel for_____ tons of chemicals.

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