Question: Hello! Please answer the two questions BELOW. Thank you! Problem 40-03 (algo) The following hypothetical production possibilities tables are for China and the United States.

 Hello! Please answer the two questions BELOW. Thank you! Problem 40-03

Hello! Please answer the two questions BELOW. Thank you!

(algo) The following hypothetical production possibilities tables are for China and theUnited States. Assume that before specialization and trade the optimal product mix

Problem 40-03 (algo) The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative B and for the United States is alternative U. China Production Possibilities Product A B C D E F Apparel 60, 000 48, 000 36, 000 24, 000 12, 000 0 Chemicals ( tons) 0 12 24 36 48 60 U.S. Production Possibilities Product R S T U V W Apparel 20, 000 16, 000 12, 000 8, 0000 4, 000 0 Chemicals (tons) 0 8 16 24 32 40 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? Yes If so, what product should each produce? China should produce ( apparel The United States should produce ( chemicals b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: 4000 units Chemicals: 4 ton(s) c. What are the limits of the terms of trade? 1000 units of apparel for 1 ton of chemicals and 1000 units of apparel for 2 tons of chemicals.Suppose that the actual terms of trade are 1,000 units of apparel for 11/2 tons of chemicals and that 8,000 units of apparel are exchanged for 12 tons of chemicals. What are the gains from specialization and trade for each nation

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