Question: In the example in Question 2, suppose that the United States always wishes to consume autos and textiles at the ratio of 1 auto to

In the example in Question 2, suppose that the United States always wishes to consume autos and textiles at the ratio of 1 auto to 10 textiles. What quantity of each good would the United States consume in autarky? What combination would the United States consume with trade and complete specialization? What would be the gains from trade?

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In autarky the production and consumption of textiles and autos will utilize all the available 1000 days of labor Thus with T number of units of texti... View full answer

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