Countries A and B currently consume 400 units of food and 400 units of textiles each and currently do not trade with one another. The citizens of country A have to give up one unit of food to gain two units of textiles, while the citizens of country B have to give up one unit of textiles to gain two unifood. Their production possibilities curves are shown.textiles1200CauntryASlopedf2line600400CountryBSlopeoflineTo200400600Under the theory of comparative advantage:O a. The citizens of country A should make textiles and trade with the citizens of country B for food.Ob. There are no gains from trade in this example.O. The citizens of country A should make food and trade with the citizens of country B for textiles.O d. A is twice as good as B at making food and B is twice as good as A at making textiles.

The given graph shows the production possibility of two goods that are good and textiles by two…

Countries A and B currently consume 400 units of food and 400 units of textiles each and currently do not trade with one another. The citizens of country A have to give up one unit of food to gain two units of textiles, while the citizens of country B have to give up one unit of textiles to gain two food. Their production possibilities curves are shown. textiles 1200 Cauntry A 2 Slopedf line 600 400 Country B Slopeof line To200 400 600 Under the theory of comparative advantage: O a. The citizens of country A should make textiles and trade with the citizens of country B for food. Ob. There are no gains from trade in this example. O. The citizens of country A should make food and trade with the citizens of country B for textiles. O d. A is twice as good as B at making food and B is twice as good as A at making textiles.

Countries A and B currently consume 400 units of food and 400 units of textiles each and currently do not trade with one another. The citizens of country A have to give up one unit of food to gain two units of textiles, while the citizens of country B have to give up one unit of textiles to gain two food. Their production possibilities curves are shown. textiles 1200 Cauntry A 2 Slopedf line 600 400 Country B Slopeof line To200 400 600 Under the theory of comparative advantage: O a. The citizens of country A should make textiles and trade with the citizens of country B for food. Ob. There are no gains from trade in this example. O. The citizens of country A should make food and trade with the citizens of country B for textiles. O d. A is twice as good as B at making food and B is twice as good as A at making textiles.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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