This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1000 production units.
With one unit of production? (a mix of? land, labor,? capital, and? technology), China can produce either 18 containers of toys or 7 cases of wine.
France can produce either 33 cases of toys or 77 cases of wine.? Thus, a production unit in China is sixsix times as efficient compared to France when producing? toys, but equally efficient when producing wine. Assume at first that no trade takes place. China allocates 750 production units to building toys and 250 production units to producing wine. France allocates 250 production units to building toys and 750 production units to producing wine.
a. What is the production and consumption of China and France without? trade?
b. Assume complete? specialization, where China produces only toys and France produces only wine. What would be the effect on total production?
a. What is the production and consumption of China and France without trade?
Calculate the production and consumption of China and France without trade? below: ?(Round to the nearest? integer.)