question archive 1) The following are production possibilities tables for China and US
1) The following are production possibilities tables for China and US
Subject:EconomicsPrice: Bought3
1) The following are production possibilities tables for China and US. Assume that before specialization and trade the optimal product mix for China is alternative B and for US is alternative U. China's Production Possibilities Product A B C D E F Apparels (in thousands) 30 24 18 12 6 0 Chemicals (in tons) 06 12 18 24 30 Product Apparels (in thousands) Chemicals (in tons) US Production Possibilities R S T U V W 10 8 6 4 2 0 0 48 12 16 20 a. What product should each country produce? Show your working. b. What is the total gain in apparel and chemical output that would result if each country specializes? c. What are the limits of the terms of trade? d. Suppose that 4 units of apparels are exchanged for 6 units of chemicals. Draw a table showing the gains from specialization and trade for each nation?
