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The table below shows the labour productivity for the countries of Yin and Yang Lore bread YIR If the working populations of Yin and Yang are both 50 million vided equally between the two industries in each country, how many machines and lowes of bread on milions are currently being produced in Yin and Yang? Machine Meer Or bread 19,000,000 10,000,000 YER 10
The table below shows the labour productivity for the countries of Yin and Yang Lore bread YIR If the working populations of Yin and Yang are both 50 million vided equally between the two industries in each country, how many machines and lowes of bread on milions are currently being produced in Yin and Yang? Machine Meer Or bread 19,000,000 10,000,000 YER 10.000.000 250.000.000 300.000,00 125,000 the two countries decide to speciali, in which product does each country have a comparative advantage Yangon of bread Yine machines Yang: loaves of bread the two countries specialize in the product in which they have a comparative advantage, show their total outputs in the table below Machines 150,000,000 Leaves of bread zin 500,000,000 150,000,000 500,000,000 Totale d. What are the gains from trade? Loures or Machines 25.08.194 209.919.000
Expert Solution
Productivity gives the number of machine and loaves of bread that can be produced by a single worker.
There are 50 million workers and if half of the worker produce machine and other half produce loaves of bread in each country then 25 million workers in Yin produce machine and remaining 25 million workers produce loaves of bread. Similary, for Yang, 25 million producing machine and remaining 25 million producing loaves of bread.
b.
| Machines | Loaves of Bread | |
| Yin | 3*25 million = 75 million = 75000000 | 2*25 million = 50 million = 50000000 |
| Yang | 2*25 million = 50million = 50000000 | 10*25 million = 125 million = 125000000 |
| Total | 125000000 | 175000000 |
c. Each countries produce what they have comparative advantage so entire 50 million workers in Yin produce machine and entire 50 million workers in Yang produce loaves of bread:
| Machines | Loaves of Bread | |
| Yin | 3*50 million = 150 million = 150000000 | 2*0 million = 0 |
| Yang | 2* 0 million = 0 | 10*50 million = 500 million = 500000000 |
| Total | 150000000 | 500000000 |
d. Gains from trade gives difference between total output under comparative advantage specialisation and autarky where both countries produce both:
| Machines | Loaves of Bread |
| 150 million - 125 million = 25 million = 25000000 | 500 million - 175 million = 325 million = 325000000 |
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