Now suppose that if Zimbabwe uses all of its resources, it can produce 50,000 tons of metal ores or 100,000 delivery trucks (trading off at a constant rate). Suppose that if South Africa uses all of its resources, it can produce 20,000 tons of metal ores or 80,000 delivery trucks (trading off at a constant rate). What is the direction of trade (who exports what to whom)? Be sure to give the opportunity costs of production of both goods for both countries.

Zimbabwe and South Africa are trading partners. Both produce metal ores (including lithium) and delivery trucks.

(Note: The numbers below are fake, but the direction of trade is real!)

Who wins and who loses from the trade in metal ores?

Answer rating: 100% (QA)

Solution Zimbabwe production of metal ore50 000 To... View the full answer