Assume a Ricardian, constant-cost world. There are two countries, the United States and Canada. Each country can produce cameras and milk. The table below shows production per man-hour for each country. US Canada cameras 6 2 milk 1 2 The United States has a labor force of 1,000 workers, and Canada has a labor force of 500 workers. a) Graph the world supply curve for cameras. b) Show a possible world demand curve and price (assuming that both countries completely specialize).
Assume a Ricardian, constant-cost world. There are two countries, the United States and Canada. Each country can produce cameras and milk. The table below shows production per man-hour for each country. US Canada cameras 6 2 milk 1 2 The United States has a labor force of 1,000 workers, and Canada has a labor force of 500 workers. a) Graph the world supply curve for cameras. b) Show a possible world demand curve and price (assuming that both countries completely specialize).
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter21: International Trade And Comparative Advantage
Section: Chapter Questions
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Assume a Ricardian, constant-cost world. There are two countries, the United States and
Canada. Each country can produce cameras and milk. The table below shows production per
man-hour for each country.
US | Canada | |
cameras | 6 | 2 |
milk | 1 | 2 |
The United States has a labor force of 1,000 workers, and Canada has a labor force of 500
workers.
a) Graph the world supply curve for cameras.
b) Show a possible world demand curve and price (assuming that both countries completely
specialize).
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