Production Advantage and Opportunity Costs Assume there are two countries, the United States and France, and two goods, automobiles and computers. The table presented below shows the number of automobiles and computers that the United States and France can produce with the same amount of resources. France=100 automobiles and 55 computers United States=120 automobiles and 60 computers.   1.4 If free trade exists between the United States and France, what are the highest and lowest levels for the price of an automobile (expressed in terms of computers)? Motivate your answer by stating which level favours the United States and France

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
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Chapter33: International Trade
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Production Advantage and Opportunity Costs
Assume there are two countries, the United States and France, and two goods, automobiles and
computers.
The table presented below shows the number of automobiles and computers that the United States and
France can produce with the same amount of resources.

France=100 automobiles and 55 computers

United States=120 automobiles and 60 computers.

 

1.4 If free trade exists between the United States and France, what are the highest and lowest
levels for the price of an automobile (expressed in terms of computers)? Motivate your
answer by stating which level favours the United States and France

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