Question

Suppose that Australia and Japan can both produce wool and digital video cameras. One worker in Australia can produce 100kg of wool or 5 digital video cameras per week. In contrast one worker in Japan can produce 50kg of wool or 10 digital video cameras per week. Suppose these countries decide to specialise and trade half of their products in a ratio of 10kg of wool for one digital video camera.

After the trade, the consumption (kg's of woo)of wool in Australia is:

A.40

B. 50

C. 25

D. 0

2. After the trade, the consumption (kg's of wool)of wool in Japan is:

A.60

B. 25

C. 50

D. 30

3. After the trade, the consumption (number of cameras) of digital video cameras in Australia is:

A. 25

B. 30

C. 20

D. 5

4. After the trade, the consumption (number of cameras) of digital video cameras in Japan is:

A. 20

B. 5

C. 10

D. 25

Answer 1

The solution to this problem is given by