Question

Suppose that a worker in Caninia can produce either 2 blankets or 8 meals per day, and a worker in Felinia can produce either 5 blankets or 1 meal per day. Each nation has 10 workers. For many years, the two countries traded, each completely specializing according to their respective comparative advantages. Now war has broken out between them and all trade has stopped. Without trade, Caninia produces and consumes 10 blankets and 40 meals per day and Felinia produces and consumes 25 blankets and 5 meals per day. The war has caused the combined daily output of the two countries to decline by

Answer 1

Answer:

The answer to the question is

The war has caused the combined daily output of the two countries to decline by 50%

Step-by-step explanation:

To solve this we have

a worker at Caninia  produce Blankets = 2 and Meals = 8

a worker at Felinia produce Blankets = 5 and Meals = 1

Each country has 10 workers, therefore, total production rate for each of the two countries is

Caninia  produce Blankets = 20 and Meals = 80

Felinia produce Blankets = 50 and Meals = 10

Total production = Blankets = 70 and Meals = 90

Without trade between the two countries we have

Caninia  produce Blankets = 10 and Meals = 40

Felinia produce Blankets = 25 and Meals = 5

Total production = Blankets = 35 and Meals = 45

Therefore the war has caused the combined daily output of the two countries to decrease by

Initial  total production = Blankets = 70 and Meals = 90

Present total production = Blankets = 35 and Meals = 45

Difference in production= Blankets = 35 and Meals = 45

(Decline in production)/(Initial production)×100

For blankets → (35/70)×100 = 50 % decrease

For Meals → (45/90)×100 = 50 % decrease

Total decrease in daily output for the two countries = 50 %