# Which group will benefit from trade between Chile and Argentina?

Which group will benefit from trade between Chile and Argentina?.

Chile and Argentina each produce jellybeans and peanut butter using labor as their only resource. Ea Show more Chile and Argentina each produce jellybeans and peanut butter using labor as their only resource. Each country has 1000 hours of labor. In Chile 1 hour produces 1 pound of jellybeans and 2 hours produce 1 pound of peanut butter. In Argentina 1 hour produces 1 pound of jellybeans and 3 hours produces 1 pound of peanut butter. When they do not trade with each other Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter and Argentina consumes 400 pounds of jellybeans and 200 pounds of peanut butter. 1.Which group will benefit from trade between Chile and Argentina? Below Argentina peanut butter producers = the Argentinian workers who make peanut butter before trade takes place. Explain why. A) Chilean consumers B) Argentinean peanut butter producers C) Argentine consumers D) Chilean consumers Argentinean peanut butter producers and Argentine consumers 2. Calculate the real wage in terms of peanut butter in Argentina before trade. Measure real wages using the earnings of 1 hour of labor. 3. For the questions below assume that Argentina and Chile are engaged in free trade and that Pjellybeans T /Ppeanutbutter T = 2/5. -1. Calculate the real wage in terms of peanut butter in Argentina under free trade. Again measure real wages using the earnings of 1 hour of labor. 2. Calculate the wage of Argentina relative to the wage of Chile under free trade. Show less

Which group will benefit from trade between Chile and Argentina?

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