suppose that france and austrailia both produce fish and wine.france\'s oppurtun
ID: 1178807 • Letter: S
Question
suppose that france and austrailia both produce fish and wine.france's oppurtunity cost of proucing a bottle of wine is 4 pounds of fish.while australias oppurtunity cost of producing a bottle of wine is 7 pounds per fish.by comparing the oppurtunity costs of producing wine in the two countries you can tell that _________( france or austrailia )has a comparative advantange in the production of wine and that _______(france or austrailia) has a comparative advantage in the production of fish.
suppose that france and austrialia consider trading wine and fish with each other.france can gain specialization and trade as it recieves more than __________( 7lbs,1lb,4lbs,1/4lb,1/7lb)of fish per each bottle of wine it exports to austrailia.similarly australia can gain from trade as long as it recieves more then _______(4 blottles, 7 bottles, 1/7 bottle, 1/4 bottle, 1 bottle) of wine for each pound of fish it exports from france.
based on the answer to the last question which of the following terms of trade ( that is price of wine in terms of fish) would allow austriala and france to gain from trade ( check all that apply)
A) 6 pounds of fish to one bottle of wine,B)5 pounds of fish per bottle of wine C)8 pounds of fish per bottle of wine D) 3 pounds of fish per bottle of wine
Explanation / Answer
france has comparative advantage in producing wine and australia has comp. advantage in producing fish
4 lbs, 1/7
both A and B
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