Consider the production productivity matrix of two goods from the US and India:   United States of America  India Labor force 200 800 Labor per unit corn 8 50 Labor per unit automobile 10 40 Still using the matrix above, let us assume that in an autarkic economy, the US can produce and consume 8 units of corn and 11 units of automobile; India can produce and consume 14 units of corn and 7 units of auto mobile. After deciding to engage in international trade, both countries agreed to trade 15 units of corn and 12 units of automobiles. How many units of automobile should each country agree to trade with each other if India will gain nothing from the trade? Group of answer choices 17 13 15 12

Survey Of Economics
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Chapter21: International Trade And Finance
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Consider the production productivity matrix of two goods from the US and India:

  United States of America  India
Labor force 200 800
Labor per unit corn 8 50
Labor per unit automobile 10 40

Still using the matrix above, let us assume that in an autarkic economy, the US can produce and consume 8 units of corn and 11 units of automobile; India can produce and consume 14 units of corn and 7 units of auto mobile. After deciding to engage in international trade, both countries agreed to trade 15 units of corn and 12 units of automobiles.

How many units of automobile should each country agree to trade with each other if India will gain nothing from the trade?

Group of answer choices
  • 17
  • 13
  • 15
  • 12
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