Answer all parts..... If not I ll downvote 11:05 PM O Å M96Country ACountry BCoffeeTeaCoffeeТea50 pounds 0 pounds30 pounds 0 poundsO pounds 100 pounds 0 pounds 120 poundsSuppose Country A and Country B are the onlytwo countries on planet Economia and theycan only produce two goods; coffee and tea.The tables above describe their differentproduction possibilities.1. If both countries do not trade and simplysplit their resources equally in theproduction of coffee and tea, how muchcoffee and tea will exist in Economia?2. Which country has the lower opportunitycost in the production of coffee? Whichcountry has a lower opportunity cost in theproduction of tea?3. If Country A and Country B decide tospecialize in the production of the good inwhich they have a comparative advantagein, which good will Country A produce?Which good will Country B produce?4. If both Country A and Country B produceonly the good in which they have acomparative advantage in, how muchcoffee and tea will exist in Economia?5. Do gains from specialization and tradeexist? Explain why or why not.

The production possibility frontier (PPF) is a curve that is used to discover the mix of products…

4. If both Country A and Country B produce only the good in which they have a comparative advantage in, how much coffee and tea will exist in Economia? 5. Do gains from specialization and trade exist? Explain why or why not.

4. If both Country A and Country B produce only the good in which they have a comparative advantage in, how much coffee and tea will exist in Economia? 5. Do gains from specialization and trade exist? Explain why or why not.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 5PA

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