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28 Sep 2019
In one day Adam can produce either 5 shirts or 10 ties, and in one day Bob can produce either 6 shirts or 15 ties. Of course, Adam or Bob could split their time between producing shirts and ties and produce some combination of the two goods. Suppose Adam and Bob each specialize in the production of the good for which he has a comparative advantage. At which of the following prices will both Adam and Bob gain from trade?
a. 6 ties for 2 shirts
b. 4 ties for 1 shirt
c. 7 ties for 4 shirts
d. None of these choices
In one day Adam can produce either 5 shirts or 10 ties, and in one day Bob can produce either 6 shirts or 15 ties. Of course, Adam or Bob could split their time between producing shirts and ties and produce some combination of the two goods. Suppose Adam and Bob each specialize in the production of the good for which he has a comparative advantage. At which of the following prices will both Adam and Bob gain from trade?
a. 6 ties for 2 shirts
b. 4 ties for 1 shirt
c. 7 ties for 4 shirts
d. None of these choices
Yusra AneesLv10
28 Sep 2019