QUESTION 11 3 points Save Answer COMPARATIVE ADVANTAGE: England will produce 600

Question

QUESTION 11 3 points Save Answer COMPARATIVE ADVANTAGE: England will produce 600 units of wool and Portugal will sepcialize in producing 250 units of wine. A trade agreement has been reached which is 2.4 units of wool for one unit of wine. England asks Portugal for 120 units of wine. Therefore, England will send Portugal uni ts of wool and after trade England will still have 288 units of wool 312 units of wool 130 units of wine 50 units of wool 550 units of wool 120 units of wine 312 units of wool 288 units of wool 130 units of wine 50 units of wool 450 units of wool 100 units of wine units of wool and Portugal will have units of wine

Explanation / Answer

This can be solved as:-

1 unit wine will cost 2.4 unit of wool, therefore

120 unit of wine will cost = 2.4 * 120 = 288 unit of wool.

After trade england will still have 600 - 288 = 312 unit wool.

And portugal will have 250 - 120 = 130 unit of wine

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