Chile and Argentina each produce jellybeans and peanut butter, using labor as their only resource. Each country has 1,000 hours of labor. In Chile, an hour produces a pound of jellybeans and 2 hours produce a pound of peanut butter. In Argentina, an hour produces a pound of jellybeans and 3 hours produces a pound of peanut butter. When they do not trade with each other, Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter, and Argentina consumes 400 pounds of jellybeans and 200 pounds of peanut butter. In order for Chile to gain from trade, the price of jellybeans must be less than:
A) 2 pounds of peanut butter per pound of jellybeans.
B) 3 pounds of peanut butter per pound of jellybeans.
C) 1/3 pound of peanut butter per pound of jellybeans.
D) 1/2 pound of peanut butter per pound of jellybeans.
Correct Answer:
Verified
Q109: Chile and Argentina each produce jellybeans and
Q110: Chile and Argentina each produce jellybeans and
Q111: Chile and Argentina each produce jellybeans and
Q112: With trade, a country will maximize its
Q113: Chile and Argentina each produce jellybeans and
Q115: Chile and Argentina each produce jellybeans and
Q116: Chile and Argentina each produce jellybeans and
Q117: (Figure: Upperia's Production and Consumption) The graph
Q118: Chile and Argentina each produce jellybeans and
Q119: If the international terms of trade settle
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents