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cucumbers and avocados are produced in both U.S. and Canada. U.S. can produce up to 180,000kg of cucumbers and 135,000 kg of avocados in a year. Canada can produce 80,000kg of cucumbers and 120,000 kg of avocados. What would be the world gain in kg of cucumbers if the country that has comparative advantage in the production of avocados produces 30,000 kg more of avocados and the other country produces 30,000 kg less of avocados? the two countries agree to trade 1kg of avocados for 1.5 kg of cucumbers.

Answer :

If the country with a comparative advantage in avocado production produces 30,000 kg more avocados and the other country produces 30,000 kg less avocados, the world gain in kg of cucumbers would be 67,500 kg.

The world gain in kg of cucumbers can be calculated by comparing the additional avocado production in the country with a comparative advantage and the reduced avocado production in the other country.

Let's start by determining the change in avocado production. The country with a comparative advantage produces 30,000 kg more avocados, resulting in a total production of 135,000 kg + 30,000 kg = 165,000 kg. On the other hand, the other country produces 30,000 kg less avocados, leading to a total production of 120,000 kg - 30,000 kg = 90,000 kg.

Next, we need to determine the gain in cucumbers due to this change. Since the two countries agree to trade 1 kg of avocados for 1.5 kg of cucumbers, we can calculate the gain in cucumbers as follows:

Gain in cucumbers = (Additional avocado production) * (Cucumber exchange rate)
= (165,000 kg - 120,000 kg) * (1.5 kg of cucumbers / 1 kg of avocados)
= 45,000 kg * 1.5
= 67,500 kg

Therefore, the world gain in kg of cucumbers would be 67,500 kg.

In conclusion, if the country with a comparative advantage in avocado production produces 30,000 kg more avocados and the other country produces 30,000 kg less avocados, the world gain in kg of cucumbers would be 67,500 kg.

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