Exhibit 29-5 -Refer to Exhibit 29-5

question 96

Essay

Exhibit 29-5 $$\begin{array} { | c | c | c | } \hline & \text { Wheat } & \text { Strawberries } \\\hline \text { Mexico } & 6 \text { bushels } & 2 \text { pints } \\\hline \text { United States } & 6 \text { bushels } & 4 \text { pints } \\\hline\end{array}$$
-Refer to Exhibit 29-5. Suppose that the following table represents the production of wheat and strawberries per unit of labor in the United States and Mexico:
(A) Which caunty has a camparative atyantage in wheat protuction? Why?
(B) Which cauntry has an absolute atvantage in wheat? in strawberres? Why?
(C) With free trade between the United States and Mexdca, is it passible that 1 bushel af Wheat will tade far 1 pint of strawheries? Why ar why nat?
(D) Suppose the free trade price is 2 bushels of wheat far 1 pint of strawberies. Draw a klarem indicating the production passibilites curve writh and writhout tade if the United States has 100 millian units of labor. How much of each godd will the United States produce?

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