The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5

-If Bolivia can produce 6 calculators or 3 televisions in a day, and Argentina can produce 4 calculators or 12 televisions in a day, then Bolivia would be willing to trade 1 calculator for 1 television with Argentina.

Question

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
 
-If Bolivia can produce 6 calculators or 3 televisions in a day, and Argentina can produce 4 calculators or 12 televisions in a day, then Bolivia would be willing to trade 1 calculator for 1 television with Argentina.

Quizplus · Accepted Answer

Bolivia's opportunity cost for producing 1 calculator is 3/6 = 1/2 television, while Argentina's opportunity cost for producing 1 television is 4/12 = 1/3 calculator. Therefore, Bolivia has a lower opportunity cost in producing calculators and should specialize in producing them, while Argentina should specialize in producing televisions. By trading 1 calculator for 1 television, Bolivia would be able to obtain a product with a higher opportunity cost, making it beneficial for both countries to trade.

The Table Below Shows the Quantity Demanded (In Thousands) and Quantity