Homework (Ch 03) When country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFS) for Candonia and Sylvania. Both countries produce potatoes and tea, each initially (i.e., before specialization and trade) producing 12 million pounds of potatoes and 6 million pounds of tea, as indicated by the grey stars marked with the letter A. ? Candonia Sylvania 32 28 24 A TEA (Millions of pounds) CO 2 2 200 8 16 12 PPF H a TEA (Millions of pounds) 32 16 12 8 PPF i a C
Homework (Ch 03) When country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFS) for Candonia and Sylvania. Both countries produce potatoes and tea, each initially (i.e., before specialization and trade) producing 12 million pounds of potatoes and 6 million pounds of tea, as indicated by the grey stars marked with the letter A. ? Candonia Sylvania 32 28 24 A TEA (Millions of pounds) CO 2 2 200 8 16 12 PPF H a TEA (Millions of pounds) 32 16 12 8 PPF i a C
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter33: International Trade
Section: Chapter Questions
Problem 1WNG
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