Question

Country X and country Y both produce liters of wine and meters of cloth. In country X each worker in an hour can produce either 10 liters of wine or 50 meters of cloth. In country Y each worker in an hour can produce either 6 liters of wine of 24 meters of cloth. Each country has constant opportunity cost of production and each has 150 hours of labor available. Initially the two countries do not trade. Country X allocates 50 hours of labor to wine production and 100 hours of labor to cloth production so they produce a total of liters of wine and meters of cloth. Country Y allocates 50 hours of labor to wine production and 100 hours of labor to cloth production so they produce a total of liters of wine and meters of cloth. The two countries decide to specialize and then engage in trade. With specialization country X will produce liters of wine and meters of cloth, and country Y will produce liters of wine and meters of cloth. The two countries decide to trade 550 liters of wine in exchange for 2,475 meters of cloth. After trade country X will consume liters of wine and meters of cloth, and country Y will consume liters of wine and meters of cloth. After specialization and exchange, country X is able to consume more liters of wine and more meters of cloth than it could before trade. Country Y is able to consume more liters of wine and more meters of cloth after specialization and exchange than it could before specialization and exchange. Enter whole number in each blank.

Answer 1