Assume that two countries (Home and Foreign) each produce tw…

Assume that two countries (Home and Foreign) each produce two goods (corn and wheat) under constant cost production.  Home produces 0.5 ton of corn, or 1 ton of wheat, with a day of labor.  Foreign produces 1 ton of corn, or 0.5 ton of wheat, with a day of labor.  Without trade (in autarky), Home’s daily production is 20 tons of wheat and 10 tons of corn.  At which international price will Home’s gains from trade be largest?

Use the table below to answer this question:   Consider the…

Use the table below to answer this question:   Consider the productivity of workers in all three sectors of the table.  In the United States, the dollar value of textiles foregone in order to produce an additional bushel of wheat is __________, while in China, the dollar value of textiles foregone in order to produce an additional bushel of wheat is __________.