Given this set of production possibilities and consumption (trade) possibilities frontiers, what happens to the prices of wine and cloth in each country as a result of trade? a) The price of wine in Portugal increases from 1/3 yard/bottle to 1/2 yard/bottle. b) The price of cloth in Portugal decreases from 3 bottles/yard to 2 bottles/yard. c) The price of wine in England decreases from 1 yard/bottle to 1/2 yard/bottle. d) The price of cloth in England increases from 1 bottle/yard to 2 bottles/yard. e) All of the abov

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
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12. Given this set of production possibilities and consumption (trade) possibilities frontiers, what happens to the prices of wine and cloth in each country as a result of trade? a) The price of wine in Portugal increases from 1/3 yard/bottle to 1/2 yard/bottle. b) The price of cloth in Portugal decreases from 3 bottles/yard to 2 bottles/yard. c) The price of wine in England decreases from 1 yard/bottle to 1/2 yard/bottle. d) The price of cloth in England increases from 1 bottle/yard to 2 bottles/yard. e) All of the above
Portugal
England
90
90
80
80
70
70
60
60
CPF
50
50 +
40
40
30
CPF
30
PPF
20
PPF
20
10
10 +
0 10 20 30 40 50 60
O 10 20 30 40 50 60
cloth
cloth
auIM
wine
Transcribed Image Text:Portugal England 90 90 80 80 70 70 60 60 CPF 50 50 + 40 40 30 CPF 30 PPF 20 PPF 20 10 10 + 0 10 20 30 40 50 60 O 10 20 30 40 50 60 cloth cloth auIM wine
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