Question

Labor Force Home Foreign Marginal Product of Labor Shirts Apples MPLs = 2 MPLA = 5 MPLs* = 1 MPLA* = 2 L =100 L* = 240

Answer 1

Page No - 1 to Answer al Civen that The Intormation provided oppotunity cost of producing "(42)/(1/5) = 5/2 too home country. Similarly, of producing shift tor toreign "(1/1) 10/2) = 2=2". in the question shist is = 2.35:11 the opportunity cost country is So The toreign Country having lower opportunity cost of producing shist compose to home commentry- => toreign country will export shirt and the home Country will export apple under free trade. Son The statement is cong 107 Here producing Opportunity so it 12.5". the home country's opportunity cost of shirt is 2.5" and foreign country's cost two country. should be more than "2" and less than the statement is TRUE.

Page No: 2 Here, The PPF of home country is "s/2 +AIS = 100! Now, under the tree trade home will com Pletely speciallized To the production of apple -3 total production of apple "A= 100*5=500"! so home country Consume 280 Apples, as it will export sco - 280 = 220 apples' to foreign country. The statement is TRUE 12) Here. "The free trade terms of trade is "lls, -> The CPF should have the slope "-11/5" and it should pass through " A=500, 520", the production point => A = (-11/5) ste, where "c" is an arbitary constant it must pass through " A= 500) 5:0", the production point. => CE 500) => A=(-/)*+500, => A+(s)*s=500, => 5*A+uts = 2,500

The tollowing digs shows the CPF of tre voye No. 3 - home country A Apple C1:200015 - SCO shirt (2= 2500 / - 227.27 Here Cic is the CPF of home country, its horizonta - intercept and me vertical intercept are given by 42500 / S: 500* and *2500/4 = 229.294 vespective