Refer to the following table when answering the following questions.
Table 19.1: East and West Fish and Chip Production
-Consider Table 19.1. In the West, with autarky, per person fish consumption is ________ kilos and per person chip consumption is ________ kilos, assuming people spend half their incomes on each good.

Question

Refer to the following table when answering the following questions.
Table 19.1: East and West Fish and Chip Production 
-Consider Table 19.1. In the West, with autarky, per person fish consumption is ________ kilos and per person chip consumption is ________ kilos, assuming people spend half their incomes on each good.

Quizplus · Accepted Answer

With autarky in the West, the price of fish in terms of chips is 3:1 (300/100=3) and the price of chips in terms of fish is 1/3 kilos of fish per kilo of chips. With half of income spent on each good, people in the West would consume where MUf/MUc = 3 (optimal consumption rule): 
MUf/Pf = 3
MUf/100 = 3
MUf = 300
MUc/Pc = 1
MUc/Pf x Pf/Pc = 1
MUc/300 x 100/25 = 1
4MUc = 300
MUc = 75
Per person fish consumption = MUf/Pf = 300/100 = 100 kilos
Per person chip consumption = MUc/Pc = 75/1 = 75 kilos

Refer to the Following Table When Answering the Following Questions