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)
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)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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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