I am so lost on this HW. please help The table below shows the number of gallons of Wine and pounds of Cheese produced in the United Kingdom and the rest of theworld per labor hour (that is, their productivity). Assume that both the UK and the Rest of the World have 100 labor hours.ProductivityIn the United KingdomIn the Rest of the WorldWine gallons per labor hour0.251.00Cheese pounds per labor hour0.500.67 D) Then, due to the rise of worldwide demand for cheese, the world price goes to PC/Pw = 1.5. At the new terms of trade, do you thinkthe UK is better off or worse off than at the original terms of trade, and why?

International trade can be seen as the movement of goods and services across boundaries, thus…

D) Then, due to the rise of worldwide demand for cheese, the world price goes to PC/PW = 1.5. At the new terms of trade, do you think the UK is better off or worse off than at the original terms of trade, and why?

D) Then, due to the rise of worldwide demand for cheese, the world price goes to PC/PW = 1.5. At the new terms of trade, do you think the UK is better off or worse off than at the original terms of trade, and why?

MACROECONOMICS FOR TODAY

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ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter18: International Trade And Finance

Section: Chapter Questions

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Question

I am so lost on this HW. please help

The table below shows the number of gallons of Wine and pounds of Cheese produced in the United Kingdom and the rest of the
world per labor hour (that is, their productivity). Assume that both the UK and the Rest of the World have 100 labor hours.
Productivity
In the United Kingdom
In the Rest of the World
Wine gallons per labor hour
0.25
1.00
Cheese pounds per labor hour
0.50
0.67

D) Then, due to the rise of worldwide demand for cheese, the world price goes to PC/Pw = 1.5. At the new terms of trade, do you think
the UK is better off or worse off than at the original terms of trade, and why?

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