Question: can I get help with these question please ? I need some explanations. thanks Use the following example to illustrate Adam Smith's principle of absolute
can I get help with these question please ? I need some explanations. thanks

Use the following example to illustrate Adam Smith's principle of absolute advantage in international trade. a. Construct transformation or production possibilities frontiers for each country, b. identify each country's absolute advantage, C. d. determine a barter exchange rate that would lead to mutually beneficial trade, construct the trading line for each country to reflect this barter exchange rate, e. illustrate potential trade triangles for each country. Argentina Brazil Output per worker Wheat 1.5 Autos 0.5 Total labor supply 12 The numbers in the table are Output per worker 12 2. Use the following example to illustrate David Ricardo's principle of comparative advantage, repeating each step of the process outlined in Question 1. Explain also how both countries can gain from trade, even though Brazil has the absolute advantage in both wheat and autos. Argentina Brazil Output per worker Wheat 1.5 Autos 0.5 Total labor supply 12 12 3. Construct a table showing feasible choices for consumption of wheat and autos in Argentina and in Brazil before trade, and use this table also to show how specialization according to comparative advantage would enable each nation to consume both more wheat and more autos than was possible without trade. [Hint: Use the terms of trade that you selected to represent the gains from trade in Question 2 to determine the amount of imports which each nation could acquire for a given level of exports.] O WE
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
