Question

3. Gains from trade countries called Contente and Dolorlum. They each have 4 million labor hours available per month that they can use corn that can be produced using 1 hour of labor to produce jeans, corm, or a combination of both. The following table shows the amount of jeans or Corn 16 Dolorium Initially, suppose Contente uses 1 million hours of labor per month to produce jeans and 3 milion hours per month to produce corn, while Dolorium uses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce corn. Consequently, Contente produces 8 millilon pairs of jeans and 48 million bushels of corn, and Dolorium produces 15 million pairs of jeans and 20 million bushels of corn. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and corn it produces. of corn, and Dolorium's opportunity cost of producing 1 pair of jeans is has a comparative of corn. Therefore, Y has a comparative advantage in the production of jeans, and advantage in the production of corn Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce milion pairs per month, and the country that produces corn will produce million bushels per month In the following table, enter each country's production decision on the third row of bushels of corn. Suppose the country that produces jeans trades 18 million pairs of jeans to the other country in exchange for S4 million In the following table, select the amount of each good that each country exports and imports in the baxes acress the row enter each country's final consumption of each good on the line marked "Consumption.

Answer 1

hen contentses y milan bu million x82 millian when Dolovium uses milliam houwT S ymillion x20 Bo milion able to pzo dice y Pains f Jeans o labor to poduce Corns then it is able to Peoduce y milli hushels of Corn