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5. The price of trade Suppose that Italy and Germany both produce beer and shoes. Italys opportunity cost of producing a pair of shoes is 3 barrels of beer while Germanys opportunity cost of producing a pair of shoes is 11 barrels of beer. By comparing the opportunity cost of producing shoes in the two countries, you can tell that has a comparative advantage in the has a comparative advantage in the production of beer. Suppose that Italy and Germany consider trading shoes and beer with each other. Italy can gain from specialization and more than than trade as long as it receives of beer for each pair of shoes it exports to Germany. Similarty, Germany can gain from trade as long as it receives more of shoes for each barrel of beer it exports to Italy. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of beer) would allow both Germany and Italy to gain from trade? Check all that apply. 13 barrels of beer per pair of shoes O 4 barrels of beer per pair of shoes O 2 barrels of beer per pair of shoes O6 barrels of beer per pair of shoes
Suppose that Italy and Germany both produce beer and shoes. Italys opportunity cost of proc Germanys opportunity cost of producing a pair of shoes is 11 barrels of beer. By comparing the opportunity cost of producing shoes in the two countries, you can tell that production of shoes and- has a comparative advantage in the production of beer. Suppose that Italy and Germany consider trading shoes and beer with each other. Italy can galin more than of beer for each pair of shoes it exports to Germany. Similarly, Gern than mhoes for each barrel of beer it exports to Italy 1 barrel Based on y 1/11 barrel the last question, which of the following prices of trade (that is, price of s and Italy tde? Check all that apply 1/3 barrel 3 barrels eer per pair of shoes 11 barrels er per pair of shoes O 2 barrels of beer per pair of shoes 6 barrels of beer per pair of shoes
IIS from Trade (Mobile-Enabled) ad Chapter 3 | Back to Assignment Attempts: Average: /3 5. The price of trade Suppose that Italy and Germany beer and Germanys opportunity cost of producing a pair of ny both produce beer and shoes. Italys oportunity cost of producing a pair of shoes s 3 shoes. Italys opportunity cost of shoes is 11 barrels of beer. By comparing the opportunity cost of producing shoes in the two countries, production of shoes and you can tell that has a comparative advantage in the production of beer. Suppose that Italy and Germany consider trading shoes and beer with each other. Italy can gain from specialization and trade more than than of beer for each pair of shoes it exports to Germany. Similarly, Germany can gain from trade as of shoes for each barrel of beer it exports to Italy. Basepai swer to the last question, which of the following prices of trade (that is, price of shoes in terms of beer) would and 1/11 pair from trade? Check all that apply. 1/3 pair rels of beer per pair of shoes 3 pairs els of beer per pair of shoes 11 pairs els of beer per pair of shoes O 6 barrels of beer per pair of shoes
uppose that Italy and Germany both produce beer and shoes. Italys opportunity cost of producing a pair of shoes Germanys opportunity cost of producing a pair of shoes is 11 barrels of beer. By comparing the opportun ity cost of producing shoes in the two countries, you can tell that production of shoes and ▼ has a cor a comparative advantage in the production of beer Suppose that Italy and d Germany sider trading sider trading shoes and beer with each other. Italy can gain from specialization and for each pair of shoes it exports to Germany. Similarty, Germany can gain from trad more than Italy than of soes tor cach barrel of beer it exports to Italy. Based on your answer to the last question, which of the following prices of trade C and Italy to gain from trade? Check all that apply. that is, price of shoes in terms of beer) w OD 13 barrels of beer per pair of shoes O 4 barrels of beer per pair of shoes O 2 barrels of beer per pair of shoes 6 barrels of beer per pair of shoes
Bermany both produce beer and shoes. Italys opportunity cost of producing a pair of shoes is 3 barrels unity cost of producing a pair of shoes is 11 barrels of beer. opportunity cost of producing a pair of shoes is 3 barrels of be opportunity cost of producing shoes in the two countries, you can tell that s and has a comparative advantage in the production of Italy and Germany consider trading shoes and beer with each other. Italy canGermany ecialization and trade as long as it of beer for each pair of shoes it exports to Germany. Similarly, Germem con gain from trade as long as it rece of shoes for each barrel of beer it exports to Italy. hich of the following prices of trade (that is, price of shoes in terms of beer) would allow bth Ger trade (that is, price of shoes in ntrade? Check all that apply. of beer per pair of shoes beer per pair of shoes beer per pair of shoes beer per pair of shoes
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Answer #1

1) Italy; Germany

As Italy's opportunity cost of producing shoes is lower than that of Germany's.

2) 3; 1/11

The trade should be of more than their opportunity cost. .

3) 4 barrels of beer per pair of shoes

6 barrels of beer per pair of shoes

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