56 56 48 48 PPF 40 40 32 32 24 PPF 24 16 16 - -- -- -- - 8 16 24 32 40 48 56 64 16 24 32 40 48 56 64 GRAIN (Millions of pounds) GRAIN (Millions of pounds) Maldonia has a comparative advantage in the production of while Lamponia has a comparative advantage in tl production of Suppose that Maldonia and Lamponia specialize in the production of the goods in which each ha comparative advantage. After specialization, the two countries can produce a total of million pounds of sugar and million pou grain. Suppose that Maldonia ánd Lamponia agree to trade. Each country focuses its resources on producing only the good in which it has a compara advantage. The countries decide to exchange 24 million pounds of grain for 24 million pounds of sugar. This ratio of goods is known as the pri SUGAR (MIllons of pounds) SUGAR (MIlons of pounds)

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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56
56
48
48
PPF
40
40
32
32
24
PPF
24
16
16
-- --
-- -
8
16
24
32
40
48
56
64
16
24
32
40
48
56
84
GRAIN (Millions of pounds)
GRAIN (Millions of pounds)
Maldonia has a comparative advantage in the production of
while Lamponia has a comparative advantage in the
production of
Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a
comparative advantage. After specialization, the two countries can produce a total of
million pounds of sugar and
million pounds of
grain.
Suppose that Maldonia ánd Lamponia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative
advantage. The countries decide to exchange 24 million pounds of grain for 24 million pounds of sugar. This ratio of goods is known as the price of
trade between Maldonia and Lamponia.
W
SUGAR (MIlons of pounds)
SUGAR (MIlions of pounds)
Transcribed Image Text:56 56 48 48 PPF 40 40 32 32 24 PPF 24 16 16 -- -- -- - 8 16 24 32 40 48 56 64 16 24 32 40 48 56 84 GRAIN (Millions of pounds) GRAIN (Millions of pounds) Maldonia has a comparative advantage in the production of while Lamponia has a comparative advantage in the production of Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of sugar and million pounds of grain. Suppose that Maldonia ánd Lamponia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 24 million pounds of grain for 24 million pounds of sugar. This ratio of goods is known as the price of trade between Maldonia and Lamponia. W SUGAR (MIlons of pounds) SUGAR (MIlions of pounds)
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Opportunity cost refers to the loss due to giving up the best alternative in making a decision.

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