At a trading rate of two laptops per synthetic grass, the number of synthetic grass and laptops that will be available to be consumed in China, if they trade 170,000 laptops to Australia is a. 298,000 laptops and 85,000 synthetic grass.
The trading rate is the exchange rate that is used by two countries to exchange goods and services based on the value of their currencies.
In this case, the agreed trading or exchange rate between China's Laptops and Australia's Synthetic Grass is two laptops per synthetic grass.
Table 101.22
Production Capability Containers of Containers of
Laptops Synthetic Grass
China's production 390 containers/unit 125 containers/unit
China has 1,200 units 234,000 75,000
(390 x 1,200/2) (125 x 1,200/2)
Australia's production 150 containers/unit 100 containers/unit
Australia has 1,200 units 90,000 60,000
(150 x 1,200/2) (100 x 1,200/2)
Production with specialization:
China produces Laptops only 468,000 (1,200 x 390) 0
Australia will produce Grass only 120,0000 (1,200 x 100)
Trade Exchange (170,000) (85,000) (170,000/2)
Available for consumption after trade 298,000 35,000
(468,000 - 170,000) (120,000 - 85,000)
Thus, at a trading rate of two laptops per synthetic grass, the number of synthetic grass and laptops that will be available to be consumed in China, if they trade 170,000 laptops to Australia is a. 298,000 laptops and 85,000 synthetic grass.
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