Economics Homework Help

Waubonsee Community College MacroEconomics Questions

 

I don’t know how to handle this Macro Economics question and need guidance.

Assume that the  continent  of Mainland  has  only  two  countries,  Alpha and Beta, which produce  only  two  goods, corn,and  peanut.  Each  country  has 42 laborhours per  weekallocated to the production of corn or peanut. Producing a ton of corn costs 2.8 hours to Alpha and 1.4 hours to Beta. On the other side, each ton of peanut costs 1.68 hours to Alpha and 4.2 hours to Beta.

b,  Suppose each country decides to use half of its resources in the production of each commodity.  Show these points on the charts for each country as point A.

f.   If each country decides to trade 10 units of popcorn for 10 units of peanuts , show on the graphs the gain each country would receive from trade.  Label these points B. At what terms of trade did the two countries trade corn and peanut ?