Homework Help is Here – Start Your Trial Now!
Business
Economics
Suppose that there are two countries, A and B. The production possibilities frontier of country A is given by coconuts A + √fishA = 8, and the production possibilities frontier of country B is given by coconuts B + √fishB = 8 where coconuts, denotes the amount of coconuts produced by country i and fish, denotes the amount of fish produced by country i. Assume that the utility function of each country i is given by the expression U(coconutsi, fishi) min (coconutsi, fishi) = where coconuts, denotes the amount of coconuts consumed by country i and fish, is the amount if fish consumed by country i. Suppose that all gains from trade are divided equally between the countries. Determine the utility of each country when the agents can trade. Write the utility of country A here and provide a detailed explanation below. and the utility of country B here

Suppose that there are two countries, A and B. The production possibilities frontier of country A is given by coconuts A + √fishA = 8, and the production possibilities frontier of country B is given by coconuts B + √fishB = 8 where coconuts, denotes the amount of coconuts produced by country i and fish, denotes the amount of fish produced by country i. Assume that the utility function of each country i is given by the expression U(coconutsi, fishi) min (coconutsi, fishi) = where coconuts, denotes the amount of coconuts consumed by country i and fish, is the amount if fish consumed by country i. Suppose that all gains from trade are divided equally between the countries. Determine the utility of each country when the agents can trade. Write the utility of country A here and provide a detailed explanation below. and the utility of country B here

Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains From Trade
Section: Chapter Questions
Problem 3CQQ
See similar textbooks
icon
Related questions
Question

Pls anwser fast

Q6. Production possibilities frontier, gains from trade, comparative advantage, absolute advantage, and returns to scale. Suppose that there are two countries, A and B. The production possibilities frontier of country A is given by coconuts A + √fish = 8, and the production possibilities frontier of country B is given by coconuts B + √fishB = 8 where coconuts, denotes the amount of coconuts produced by country i and fish, denotes the amount of fish produced by country i. Assume that the utility function of each country i is given by the expression U (coconutsi, fishi) = min (coconutsi, fishi) where coconuts, denotes the amount of coconuts consumed by country i and fish, is the amount if fish consumed by country i. Suppose that all gains from trade are divided equally between the countries. Determine the utility of each country when the agents can trade. Write the utility of country A here and provide a detailed explanation below. and the utility of country B here
Transcribed Image Text:Q6. Production possibilities frontier, gains from trade, comparative advantage, absolute advantage, and returns to scale. Suppose that there are two countries, A and B. The production possibilities frontier of country A is given by coconuts A + √fish = 8, and the production possibilities frontier of country B is given by coconuts B + √fishB = 8 where coconuts, denotes the amount of coconuts produced by country i and fish, denotes the amount of fish produced by country i. Assume that the utility function of each country i is given by the expression U (coconutsi, fishi) = min (coconutsi, fishi) where coconuts, denotes the amount of coconuts consumed by country i and fish, is the amount if fish consumed by country i. Suppose that all gains from trade are divided equally between the countries. Determine the utility of each country when the agents can trade. Write the utility of country A here and provide a detailed explanation below. and the utility of country B here
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
SEE MORE TEXTBOOKS