Answer to Question #100196 in Macroeconomics for Tiffany

Question

1. Using a certain quantity of resources, workers in the fictitious country of Iguania can produce four bottles of penicillin or 12 loaves of bread. Using the same resources, workers in another fictitious country, Chamelia, can produce six bottles of penicillin or eight loaves of bread.
c. Complaints about "unfair trade practices" lead to a mutual embargo between these two countries. Who will gain and who will suffer because of this embargo?
Answer:

d. After a long embargo, if trade is resumed between these two countries, who would benefit the most from it?
Answer:

Answer 1

c. Chamelia will gain from embargo while Iguania will suffer. This is because Chamelia will have  uniform production of both products while in  Iguania there will be more production of bread leading to dumping in the markets.

d. After a long embargo and trade is resumed, Iguania will benefit the most. This is because it will a lot of goods available for sale in the market.