Freedonia has a comparative advantage in the production of (grain, tea, neither grain nor tea, both grain and tea), while Desonia has a comparative advantage in the production of (grain, tea, neither grain nor tea, both grain and tea). If each fully specializes that is, produces only the good for which each has a comparative advantage, the most the two countries can produce is ( )million pounds of grain and ( )million pounds of tea.As you did for Freedonia, use the green line (triangle symbol) to plot the trading possibilities line (TPL) for Desonia. Then place the black point (plus symbol) on the trading possibilities line to indicate Desonia’s consumption after specialization and trade. True or False: Without engaging in international trade, Freedonia and Desonia would not have been able to consume at the after-trade consumption bundles. (Hint: Base your answer to this question on the answers you previously entered on this page.)a) Trueb) False As you did for Freedonia, use the green Nne (triangle symbol) to plot the trading possibilitles Nne (TPL) for Desonla. Then place the black point (plussymbol) on the trading possiblities ine to indicate Desonia's consumption after specialization and trade.Desonia4842TPL36PPF30Consumption After Trade241812612182430364248GRAIN (Millions of pounds)True or False: Without engaging in International trade, Freedonia and Desonia would not have been able to consume at the after-trade consumptionbundles. (Hint: Base your answer to this question on the answers you previously entered on this page.)O TrueO FalseTEA (Millions of pounds) When a country speciallizes in the production of a good, this means that it can produce this good at a lower opportunity cost than Its trading partner.Because of this comparative advantage, both countries benefit when they specialize and trade with each other.The following graphs show the production possibilitles frontiers (PPFS) for Freedonia and Desonia. Both countries produce graln and tea, each Initially(that is, before specialization and trade) producing 18 milion pounds of grain and 9 million pounds of tea, as Indicated by grey polnts (star symbols)labeled point A.FreedoniaDesonia484842423636PPF3030242418PPF181212612182430364248612182430364248GRAIN (MIlions of pounds)GRAIN (Milions of pounds)Freedonia has a comparative advantage in the production ofproduction ofwhile Desonia has a comparative advantage in theIf each fully speclalizes (that is, produces only the good for which each has a comparative advantage), themillion pounds of grain andmost the two countries can produce ismillion pounds of tea.Suppose that Freedonia and Desonia specialize and open up to Intemational trade, and the terms of trade in the world market are 1 pound of grain for1 pound of tea. That is, Freedonla is willing to sell Desonia 1 pound of grain in exchange for 1 pound of tea, and Desonia is willing to sell Freedonla 1pound of tea in exchange for 1 pound of grain. The countries decide to exchange 18 million pounds of grain for 18 million pounds of tea.(spunod jo suo!w) Va1(spunod jo suow) Va1

A country has a comparative advantage in producing that good if the opportunity cost of producing…

Answered: Freedonia has a comparative advantage…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Freedonia has a comparative advantage in the production of (grain, tea, neither grain nor tea, both grain and tea), while Desonia has a comparative advantage in the production of (grain, tea, neither grain nor tea, both grain and tea). If each fully specializes that is, produces only the good for which each has a comparative advantage, the most the two countries can produce is ( )million pounds of grain and ( )million pounds of tea.

As you did for Freedonia, use the green line (triangle symbol) to plot the trading possibilities line (TPL) for Desonia. Then place the black point (plus symbol) on the trading possibilities line to indicate Desonia’s consumption after specialization and trade.

True or False: Without engaging in international trade, Freedonia and Desonia would not have been able to consume at the after-trade consumption bundles. (Hint: Base your answer to this question on the answers you previously entered on this page.)

a) True

b) False

As you did for Freedonia, use the green Nne (triangle symbol) to plot the trading possibilitles Nne (TPL) for Desonla. Then place the black point (plus
symbol) on the trading possiblities ine to indicate Desonia's consumption after specialization and trade.
Desonia
48
42
TPL
36
PPF
30
Consumption After Trade
24
18
12
6
12
18
24
30
36
42
48
GRAIN (Millions of pounds)
True or False: Without engaging in International trade, Freedonia and Desonia would not have been able to consume at the after-trade consumption
bundles. (Hint: Base your answer to this question on the answers you previously entered on this page.)
O True
O False
TEA (Millions of pounds)

When a country speciallizes in the production of a good, this means that it can produce this good at a lower opportunity cost than Its trading partner.
Because of this comparative advantage, both countries benefit when they specialize and trade with each other.
The following graphs show the production possibilitles frontiers (PPFS) for Freedonia and Desonia. Both countries produce graln and tea, each Initially
(that is, before specialization and trade) producing 18 milion pounds of grain and 9 million pounds of tea, as Indicated by grey polnts (star symbols)
labeled point A.
Freedonia
Desonia
48
48
42
42
36
36
PPF
30
30
24
24
18
PPF
18
12
12
6
12
18
24
30
36
42
48
6
12
18
24
30
36
42
48
GRAIN (MIlions of pounds)
GRAIN (Milions of pounds)
Freedonia has a comparative advantage in the production of
production of
while Desonia has a comparative advantage in the
If each fully speclalizes (that is, produces only the good for which each has a comparative advantage), the
million pounds of grain and
most the two countries can produce is
million pounds of tea.
Suppose that Freedonia and Desonia specialize and open up to Intemational trade, and the terms of trade in the world market are 1 pound of grain for
1 pound of tea. That is, Freedonla is willing to sell Desonia 1 pound of grain in exchange for 1 pound of tea, and Desonia is willing to sell Freedonla 1
pound of tea in exchange for 1 pound of grain. The countries decide to exchange 18 million pounds of grain for 18 million pounds of tea.
(spunod jo suo!w) Va1
(spunod jo suow) Va1

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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