QUESTION 13 wine Portugal 90 80 70 60 50 40 30. 20 10. 0 0 10 20 30 40 50 60 cloth PPF CPF wine 90 80 70 60 50 40 30 20 10 England PPF CPF 0 0 10 20 30 40 50 60 cloth 13. According to the above set of production possibilities and consumption (trade) possibilities frontiers, what will happen to production and relative prices once trade is opened between these two countries? O a) Production of cloth in Portugal will fall to zero, while the price of wine will fall to ½ yd/bottle. Ob) Production of cloth in England will fall to zero, while the price of wine will increase to ½ yd/bottle. Oc) Production of wine in Portugal will increase to 90, while the price of cloth will fall to 2 yd/bottle. O d) Production of wine in England will increase to 60, while the price of cloth will fall to 3 bottles/yd.

QUESTION 13 wine Portugal 90 80 70 60 50 40 30. 20 10. 0 0 10 20 30 40 50 60 cloth PPF CPF wine 90 80 70 60 50 40 30 20 10 England PPF CPF 0 0 10 20 30 40 50 60 cloth 13. According to the above set of production possibilities and consumption (trade) possibilities frontiers, what will happen to production and relative prices once trade is opened between these two countries? O a) Production of cloth in Portugal will fall to zero, while the price of wine will fall to ½ yd/bottle. Ob) Production of cloth in England will fall to zero, while the price of wine will increase to ½ yd/bottle. Oc) Production of wine in Portugal will increase to 90, while the price of cloth will fall to 2 yd/bottle. O d) Production of wine in England will increase to 60, while the price of cloth will fall to 3 bottles/yd.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 8PA

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