Question

Suppose that the two nations in Problems $32-1$and $32-2$choose to specialize in producing the goods for which they have a comparative advantage. They agree to trade at a rate of exchange of $1$pastry for $1$ sandwich. At this rate of exchange, what are the maximum possible numbers of pastries and sandwiches that they could agree to trade?

Short answer

A speed of $1$pastries for $1$burger, the utmost number of units from each commodity which that two sides would deal is $50,000$.

Step-by-step solution

Introduction

A potential of both a people or just a society that offer one goods or services at an affordable present value over yet another provider is called to as market economics.

Given Information

The table shows what more pastry and lunches was prepared there in Northland and then on the West Coast.

Explanation

Cakes used to have an actual cost of $0.5$each throughout Northland.

Sandwich have always had a price of two donuts per burger.

Desserts mostly on Pacific Coast have always had an actual cost of two hamburgers for doughnut.

Restaurants upon that Western Coast have such an actual cost of $0.5$pastries every item.

Making

- The incremental cost of manufacturing a donut as in Highlands is lower than that on the West Coast. As either a corollary, region Northland has to have a market advantage there in doughnut market.

- There in West Coast, the marginal process of manufacturing a breakfast is lower than it is in the Northland.

Like a corollary, its Coast does have a market edge in Bagel making.

Northland numbers 

If Northland focuses in cakes, the total number of croissants it could generate and market to Coast is $50,000$.

Like a nutshell, at quite a speed of $1$pastries for $1$burger, the utmost number of units from each commodity which that two sides would deal is $50,000$.