Westonci.ca is your trusted source for finding answers to a wide range of questions, backed by a knowledgeable community. Connect with a community of experts ready to help you find solutions to your questions quickly and accurately. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.
Sagot :
To decide whether countries should engage in trade, we need to analyze their opportunity costs and compare them with the terms of trade. Here's a step-by-step analysis:
1. Identify Opportunity Costs:
- Country A: The opportunity cost of producing 1 shoe is 3 peaches.
- Country B: The opportunity cost of producing 1 shoe is 6 peaches.
2. Analyze Terms of Trade:
- Terms of Trade Scenario 1: 5 peaches for 1 shoe.
- Terms of Trade Scenario 2: 2 peaches for 1 shoe.
3. Compare Opportunity Costs with Terms of Trade:
- Scenario 1: 5 peaches for 1 shoe
- Country A: The opportunity cost of producing 1 shoe is 3 peaches.
- Comparison: If Country A trades 1 shoe for 5 peaches, then it receives 5 peaches for a shoe it could produce at an opportunity cost of only 3 peaches. Since 3 peaches < 5 peaches, trading is not beneficial for Country A.
- Country B: The opportunity cost of producing 1 shoe is 6 peaches.
- Comparison: If Country B trades 5 peaches for 1 shoe, it means getting a shoe at a cost of 5 peaches instead of producing it for 6 peaches. Since 6 peaches > 5 peaches, trading is beneficial for Country B.
- Conclusion: According to Scenario 1 (5 peaches for 1 shoe), only Country B would benefit from trading, while Country A would not. This does not fit an ideal trade scenario where both countries should benefit.
- Scenario 2: 2 peaches for 1 shoe
- Country A: The opportunity cost of producing 1 shoe is 3 peaches.
- Comparison: If Country A trades 1 shoe for 2 peaches, it receives fewer peaches than it could produce itself (3 peaches > 2 peaches). Hence, trading is not beneficial for Country A.
- Country B: The opportunity cost of producing 1 shoe is 6 peaches.
- Comparison: If Country B trades 2 peaches for 1 shoe, it means getting a shoe at a cost of 2 peaches instead of 6 peaches. Since 6 peaches > 2 peaches, trading is beneficial for Country B.
- Conclusion: According to Scenario 2 (2 peaches for 1 shoe), Country B benefits more from trading than producing the shoe itself, while Country A does not benefit as it is trading away for a lesser value.
4. Conclusion:
- Both Scenario 1 and Scenario 2 show that Country B benefits from trading, but Country A does not in either scenario. However, the answer should reflect a situation where both countries have an opportunity or a decisive scenario.
Despite the detailed comparison for better understanding, the correct overall answers based on the scenarios are:
- Option c: The countries should trade if the terms of trade were 5 peaches for 1 shoe.
- Option d: The countries should trade if the terms of trade were 2 peaches for 1 shoe.
In essence, for Country A to trade, the terms of trade must be better aligned with their opportunity cost, i.e., receiving more value. Both scenarios give correct trading grounds.
1. Identify Opportunity Costs:
- Country A: The opportunity cost of producing 1 shoe is 3 peaches.
- Country B: The opportunity cost of producing 1 shoe is 6 peaches.
2. Analyze Terms of Trade:
- Terms of Trade Scenario 1: 5 peaches for 1 shoe.
- Terms of Trade Scenario 2: 2 peaches for 1 shoe.
3. Compare Opportunity Costs with Terms of Trade:
- Scenario 1: 5 peaches for 1 shoe
- Country A: The opportunity cost of producing 1 shoe is 3 peaches.
- Comparison: If Country A trades 1 shoe for 5 peaches, then it receives 5 peaches for a shoe it could produce at an opportunity cost of only 3 peaches. Since 3 peaches < 5 peaches, trading is not beneficial for Country A.
- Country B: The opportunity cost of producing 1 shoe is 6 peaches.
- Comparison: If Country B trades 5 peaches for 1 shoe, it means getting a shoe at a cost of 5 peaches instead of producing it for 6 peaches. Since 6 peaches > 5 peaches, trading is beneficial for Country B.
- Conclusion: According to Scenario 1 (5 peaches for 1 shoe), only Country B would benefit from trading, while Country A would not. This does not fit an ideal trade scenario where both countries should benefit.
- Scenario 2: 2 peaches for 1 shoe
- Country A: The opportunity cost of producing 1 shoe is 3 peaches.
- Comparison: If Country A trades 1 shoe for 2 peaches, it receives fewer peaches than it could produce itself (3 peaches > 2 peaches). Hence, trading is not beneficial for Country A.
- Country B: The opportunity cost of producing 1 shoe is 6 peaches.
- Comparison: If Country B trades 2 peaches for 1 shoe, it means getting a shoe at a cost of 2 peaches instead of 6 peaches. Since 6 peaches > 2 peaches, trading is beneficial for Country B.
- Conclusion: According to Scenario 2 (2 peaches for 1 shoe), Country B benefits more from trading than producing the shoe itself, while Country A does not benefit as it is trading away for a lesser value.
4. Conclusion:
- Both Scenario 1 and Scenario 2 show that Country B benefits from trading, but Country A does not in either scenario. However, the answer should reflect a situation where both countries have an opportunity or a decisive scenario.
Despite the detailed comparison for better understanding, the correct overall answers based on the scenarios are:
- Option c: The countries should trade if the terms of trade were 5 peaches for 1 shoe.
- Option d: The countries should trade if the terms of trade were 2 peaches for 1 shoe.
In essence, for Country A to trade, the terms of trade must be better aligned with their opportunity cost, i.e., receiving more value. Both scenarios give correct trading grounds.
Thank you for trusting us with your questions. We're here to help you find accurate answers quickly and efficiently. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.