Refer to the table Comparative Advantage and Trade. The table shows the number of laptops and phones that can be produced per unit of labor (the only input) in the United States and Brazil. Suppose that both countries have 100 million units of labor.
A. In the absence of trade, the United States produces and consumes 170 million laptops. Given this, how many phones can it produce and consume?
B. In the absence of trade, Brazil produces and consumes 300 million phones. How many laptops can it produce and consume?
C. If both countries trade according to their comparative advantage, then in what range would the terms of trade for laptops fall? Explain your answer.
D. With the opening of trade, the terms of trade of laptops for phones is three phones per laptop. If the United States now consumes 170 million laptops, how many can it consume?
E. With the opening of trade, the terms of trade of laptops for phones is three phones per laptop. If Brazil now consumes 300 million phones, how many laptops can it consume?
F. Represent your answers for parts A through E using the production possibility frontier (PPF) and consumption possibility frontier (CPF) for the United States and Brazil, clearly marking the points of production and consumption pre- and post-trade.

Question

Refer to the table Comparative Advantage and Trade. The table shows the number of laptops and phones that can be produced per unit of labor (the only input) in the United States and Brazil. Suppose that both countries have 100 million units of labor.
  A. In the absence of trade, the United States produces and consumes 170 million laptops. Given this, how many phones can it produce and consume?
B. In the absence of trade, Brazil produces and consumes 300 million phones. How many laptops can it produce and consume?
C. If both countries trade according to their comparative advantage, then in what range would the terms of trade for laptops fall? Explain your answer.
D. With the opening of trade, the terms of trade of laptops for phones is three phones per laptop. If the United States now consumes 170 million laptops, how many can it consume?
E. With the opening of trade, the terms of trade of laptops for phones is three phones per laptop. If Brazil now consumes 300 million phones, how many laptops can it consume?
F. Represent your answers for parts A through E using the production possibility frontier (PPF) and consumption possibility frontier (CPF) for the United States and Brazil, clearly marking the points of production and consumption pre- and post-trade.

Quizplus · Accepted Answer

The Answer of Refer to the table Comparative Advantage and Trade. The table shows the number of laptops and phones that can be produced per unit of labor (the only input) in the United States and Brazil. Suppose that both countries have 100 million units of labor.
  A. In the absence of trade, the United States produces and consumes 170 million laptops. Given this, how many phones can it produce and consume?
B. In the absence of trade, Brazil produces and consumes 300 million phones. How many laptops can it produce and consume?
C. If both countries trade according to their comparative advantage, then in what range would the terms of trade for laptops fall? Explain your answer.
D. With the opening of trade, the terms of trade of laptops for phones is three phones per laptop. If the United States now consumes 170 million laptops, how many can it consume?
E. With the opening of trade, the terms of trade of laptops for phones is three phones per laptop. If Brazil now consumes 300 million phones, how many laptops can it consume?
F. Represent your answers for parts A through E using the production possibility frontier (PPF) and consumption possibility frontier (CPF) for the United States and Brazil, clearly marking the points of production and consumption pre- and post-trade.

Refer to the Table Comparative Advantage and Trade