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5. The price of trade Suppose that Slovenia and Wales both produce ale and glass. Slovenia's opportunity cost of producing a pane of glass is 5 kegs of ale while Wales's opportunity cost of producing a pane of glass is 9 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell that production of glass and has a comparative advantage in the production of ale. has a comparative advantage in the Suppose that Slovenia and Wales consider trading glass and ale with each other. Slovenia can gain from specialization and trade as long as it receives more than of ale for each pane of glass it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of glass for each keg of ale it exports to Slovenia. Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Wales and Slovenia to gain from trade? Check all that apply. 19 kegs of ale per pane of glass 3 kegs of ale per pane of glass 1 keg of ale per pane of glass 8 kegs of ale per pane of glass

5. The price of trade Suppose that Slovenia and Wales both produce ale and glass. Slovenia's opportunity cost of producing a pane of glass is 5 kegs of ale while Wales's opportunity cost of producing a pane of glass is 9 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell that production of glass and has a comparative advantage in the production of ale. has a comparative advantage in the Suppose that Slovenia and Wales consider trading glass and ale with each other. Slovenia can gain from specialization and trade as long as it receives more than of ale for each pane of glass it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of glass for each keg of ale it exports to Slovenia. Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Wales and Slovenia to gain from trade? Check all that apply. 19 kegs of ale per pane of glass 3 kegs of ale per pane of glass 1 keg of ale per pane of glass 8 kegs of ale per pane of glass

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains Rrom Trade
Section: Chapter Questions
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5. The price of trade Suppose that Slovenia and Wales both produce ale and glass. Slovenia's opportunity cost of producing a pane of glass is 5 kegs of ale while Wales's opportunity cost of producing a pane of glass is 9 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell that production of glass and has a comparative advantage in the production of ale. Suppose that Slovenia and Wales consider trading glass and ale with each other. Slovenia can gain from specialization and trade as long as it receives more than of ale for each pane of glass it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of glass for each keg of ale it exports to Slovenia. Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Wales and Slovenia to gain from trade? Check all that apply. 19 kegs of ale per pane of glass has a comparative advantage in the 3 kegs of ale per pane of glass 1 keg of ale per pane of glass 8 kegs of ale per pane of glass
Transcribed Image Text:5. The price of trade Suppose that Slovenia and Wales both produce ale and glass. Slovenia's opportunity cost of producing a pane of glass is 5 kegs of ale while Wales's opportunity cost of producing a pane of glass is 9 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell that production of glass and has a comparative advantage in the production of ale. Suppose that Slovenia and Wales consider trading glass and ale with each other. Slovenia can gain from specialization and trade as long as it receives more than of ale for each pane of glass it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of glass for each keg of ale it exports to Slovenia. Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Wales and Slovenia to gain from trade? Check all that apply. 19 kegs of ale per pane of glass has a comparative advantage in the 3 kegs of ale per pane of glass 1 keg of ale per pane of glass 8 kegs of ale per pane of glass
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