Suppose that there are two products: clothing and soda Custom Essay

[meteor_slideshow slideshow=”arp1″]

Suppose that there are two products: clothing and soda. Both Brazil and the United States produce each product. Brazil produces 100,000 units of clothing per year and 50,000 cans of soda. The United States produces 65,000 units of clothing per year and 250,000 cans of soda. Assume that costs remain constant.
What would be the production possibility frontiers for Brazil and the United States?
Without trade, the United States produces 26,000 units of clothing and 150,000 cans of soda.
Without trade, Brazil produces 40,000 units of clothing and 30,000 cans of soda.
Denote these points on each other’s production possibility frontier.
What is the marginal transformation rate for each country?
Should the two countries specialize and trade?
If so, who has the comparative advantage in what product?
Once they specialize, how much does output increase?
What are the terms of trade if the United States trades 1 can of soda for 5 units of clothing?
Are the consumers in each country better off?

[meteor_slideshow slideshow=”arp2″]

A-Research-Paper.com is committed to deliver a custom paper/essay which is 100% original and deliver it within the deadline. Place your custom order with us and experience the different; You are guaranteed; value for your money and a premium paper which meets your expectations, 24/7 customer support and communication with your writer. Order Now

Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.

[order_calculator]