Question

1. There are 13000 units of productive capacity in the Eldorado.

Let Y = 0 + 0.07 X be the cotton production function.

Let Y = 0 + 0.35 X be the iron production function.

There are 10000 units of productive capacity in the Noplacia.

Let Y = 0 + 0.05 X be the cotton production function.

Let Y = 0 + 0.026 X be the iron production function.

The two countries will engage in international trade, if the international terms of trade are ________ tons of cotton per ton of iron

a.

3.8

b.

2.5

c.

3.5

d.

2.8

e.

1.8

Answer 1