Question

Here are some hypothetical numbers used to illustrate the ideas of trade-offs, specialization, and comparative advantage. Assume Sri Lanka, using all her resources efficiently, can produce either 1,000 bags of rice OR 3,000 bags of tea. Let's also assume that, using all her resources efficiently, Kenya can produce either 1,000 bags of rice OR 1,000 bags of tea. Further, assume that the countries have similar resource endowments and that, initially, they are not trading with each other. Therefore, each of the countries has to produce both rice and tea for its citizens. Suppose that, in the no-trade situation, Sri Lanka was consuming 400 bags of rice and 1,800 bags of tea, and in the no-trade situation, Kenya was consuming 500 bags of rice and 500 bags of tea. Now, let's play a fun game called the "Trading Game" to figure out whether there is any benefit (in terms of increased consumption possibilities) for these two countries if they trade with each other. You are given the following information to start the "Trading Game". The trading price is set at one bag of rice for two bags of tea, and Kenya wishes to keep at least 550 bags of rice after trade. Apply your knowledge of opportunity cost to identify the comparative advantage enjoyed by each country. Now using your knowledge of specialization and trade, show in a multi-paragraph essay, that the two countries can benefit by consuming more of both goods after trade. Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical manner as appropriate for the genre of writing. Use well-structured sentences, audience-appropriate language, and correct conventions of standard American English. NEED THIS ESSAY ASAP

Answer 1

Creation limit of Srilanka: either 1,000 sacks of rice OR 3,000 packs of tea

Creation limit of Kenya: 1,000 sacks of rice OR 1,000 packs of tea

In no exchange circumstance:

Sri Lanka is expending 400 sacks of rice and 1,800 packs of tea

Kenya was expending 500 sacks of rice and 500 packs of tea

Rate of transformation is one sack of rice for two packs of tea

Limitation: Kenya wishes to keep no less than 550 packs of rice after exchange

According to the given information,

Similar preferred standpoint hypothesis is connected, according to this hypothesis,

Srilanka will just create 3000 packs of Tea

What's more,

Kenya will just create 1000 sacks of rice and afterward both the nations will exchange with one another.

Since Kenya needs to keep 550 sacks of rice then 450 packs of rice will be given to Srilanka and Srilanka will give 900 sacks of tea in lieu of 450 sacks of rice given by Kenya.

Presently Kenya will have 550 packs of Rice and 900 sacks of Tea for utilization.

furthermore,

Srilanka will have 450 packs of rice and 2100 sack of Tea.

Presently because of exchange

Srilanka have overflow of 50 packs of rice and 300 sacks of tea after utilization.

Kenya have overflow of 50 packs of rice and 400 sacks of Tea after utilization.

Above helpful situation came because of relative favorable position hypothesis and exchange with one another.