kieramacphee1972 kieramacphee1972

18-06-2024
Business

Answered

Suppose that ireland and luxembourg consider trading liquor and ale with each other. ireland can gain from specialization and trade as long as it receives more than5 kegs of ale for each case of liquor it exports to luxembourg. similarly, luxembourg can gain from trade as long as it receives more than1/10 case of liquor for each keg of ale it exports to ireland. based on your answer to the last question, which of the following prices of trade (that is, price of liquor in terms of ale) would allow both luxembourg and ireland to gain from trade?

a. 2 kegs of ale per case of liquor
b. 1 keg of ale per case of liquor
c. 7 kegs of ale per case of liquor
d. 19 kegs of ale per case of liquor

Answer :

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