Question

A German worker takes 400 hours to produce a car and 2 hours to produce a case of wine. A French worker takes 600 hours to produce a car and X hours to produce a case of wine. For what values of X will gains from trade be possible

Answer 1

Answer and Explanation:

Given that

Number of hours taken to produced a car by German worker is 400 hours

In case of wine he takes 2 hours

And, the Number of hours taken to produced a car by French worker is 600 hours

In case of wine he takes X hours

Based on the above information, the values of X gains from trade is based on the opportunity cost so in this there is a competitive advantage occurs so in this case the values should be other than 3 as 600 hours ÷ hours = 300 hours

Hence, the values should be other than 3