Assume two nations: Vietnam and US, and two commodities: clothing and wheat. There is only one factor of production: labour. The following table presents the number of hours it takes to produce one unit of the good in each nation: US Vietnam 6 hours Wheat 5 hours Clothing 4 hours 8 hours 1. The relative price of clothing in the US is... a) 5/8 kg of wheat b) 8/5 yards of clothing c) 8/5 kg of wheat d) 5/8 yards of clothing 2. If US and Vietnam were to trade, the relative price of wheat... a) Can be 2 yards of clothing b) Must be between 5/8 and 1.5 yards of clothing c) Must be between 2/3 and 1.6 yards of clothing d) Can be ½ yards of clothing.
Assume two nations: Vietnam and US, and two commodities: clothing and wheat. There is only one factor of production: labour. The following table presents the number of hours it takes to produce one unit of the good in each nation: US Vietnam 6 hours Wheat 5 hours Clothing 4 hours 8 hours 1. The relative price of clothing in the US is... a) 5/8 kg of wheat b) 8/5 yards of clothing c) 8/5 kg of wheat d) 5/8 yards of clothing 2. If US and Vietnam were to trade, the relative price of wheat... a) Can be 2 yards of clothing b) Must be between 5/8 and 1.5 yards of clothing c) Must be between 2/3 and 1.6 yards of clothing d) Can be ½ yards of clothing.
Chapter18: International Trade And Comparative Advantage
Section: Chapter Questions
Problem 2TY
Related questions
Question
Practice Pack
CHOOSE ONLY ONE OPTION FROM EACH PLEASE. Be aware that the numbers in the table reveal the labour HOURS needed to produce ONE unit of the good.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Includes step-by-step video
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you