Question: 3. The two countries US and Fiji produce two goods bananas (Y) and machines (X). Suppose the unit labor requirements are 4 units to produce bananas in the US and 2 units to produce them in Fiji, and 2 units to produce machines in the US and 4 units to produce it in Fiji, given the US has 3200 workers and Fiji has 4000 workers. 400 Based on your understandingShow transcribed image textGiven Solution: Question 1 Part A The United States of America and Fiji have a comparative advantage in the production of bananas. There is potential for economic growth for both nations if they engage in trade. The opportunity cost of using one mach…View the full answerTranscribed image text: 3. The two countries US and Fiji produce two goods bananas (Y) and machines (X). Suppose the unit labor requirements are 4 units to produce bananas in the US and 2 units to produce them in Fiji, and 2 units to produce machines in the US and 4 units to produce it in Fiji, given the US has 3200 workers and Fiji has 4000 workers. 400 Based on your understanding of the Ricardo model of trade, illustrate using trade diagrams to show pattern of trade, (ii) gains from trade, and (iii) total world production of both goods before and after trade, (iv) autarky and international price ratios and finally the (v) trade triangles! How do you show the gains from free trade?
