Homework: Chapter 15 A country may specialize in the production of a good that it can produce at a lower opportunity cost than its trading partners. Because of this comparative advantage, countries benefit when they specialize and trade with each other. The following graphs show the production possibilities curves (PPCs) for Maldonia and Sylvania. Both countries produce lemons and tea, each initially (i.e., before specialization and trade) producing 6 million pounds of lemons and 3 million pounds of tea, as indicated by the grey stars marked with the letter A. TEA (Millions of pounds) 14 12 10 4 2 6 PPC Maldonia 0 2 14 16 LEMONS (Millions of pounds) (? TEA (Millions of pounds) 2 8 16 14 12 PPC Sylvania 0 2 468 12 14 16 LEMONS (Millions of pounds) ? Maldonia has a comparative advantage in the production of production of while Sylvania has a comparative advantage in the Suppose that Maldonia and Sylvania specialize in the production of the goods in which each has a 80 a < DII F2 F3 F4 F5 F6 F7 F8 $ 54 #3 E D 55 9> 6 R T Y F G H & 27 U * 8 - 8 F9 61 9 0 0 J K L TA F10 P יד F11
Homework: Chapter 15 A country may specialize in the production of a good that it can produce at a lower opportunity cost than its trading partners. Because of this comparative advantage, countries benefit when they specialize and trade with each other. The following graphs show the production possibilities curves (PPCs) for Maldonia and Sylvania. Both countries produce lemons and tea, each initially (i.e., before specialization and trade) producing 6 million pounds of lemons and 3 million pounds of tea, as indicated by the grey stars marked with the letter A. TEA (Millions of pounds) 14 12 10 4 2 6 PPC Maldonia 0 2 14 16 LEMONS (Millions of pounds) (? TEA (Millions of pounds) 2 8 16 14 12 PPC Sylvania 0 2 468 12 14 16 LEMONS (Millions of pounds) ? Maldonia has a comparative advantage in the production of production of while Sylvania has a comparative advantage in the Suppose that Maldonia and Sylvania specialize in the production of the goods in which each has a 80 a < DII F2 F3 F4 F5 F6 F7 F8 $ 54 #3 E D 55 9> 6 R T Y F G H & 27 U * 8 - 8 F9 61 9 0 0 J K L TA F10 P יד F11
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section: Chapter Questions
Problem 10SQ
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Transcribed Image Text:Homework: Chapter 15
A country may specialize in the production of a good that it can produce at a lower opportunity cost than its trading partners. Because of this
comparative advantage, countries benefit when they specialize and trade with each other.
The following graphs show the production possibilities curves (PPCs) for Maldonia and Sylvania. Both countries produce lemons and tea, each initially
(i.e., before specialization and trade) producing 6 million pounds of lemons and 3 million pounds of tea, as indicated by the grey stars marked with the
letter A.
TEA (Millions of pounds)
14
12
10
4
2
6
PPC
Maldonia
0
2
14
16
LEMONS (Millions of pounds)
(?
TEA (Millions of pounds)
2
8
16
14
12
PPC
Sylvania
0
2
468
12
14
16
LEMONS (Millions of pounds)
?
Maldonia has a comparative advantage in the production of
production of
while Sylvania has a comparative advantage in the
Suppose that Maldonia and Sylvania specialize in the production of the goods in which each has a
80
a
<
DII
F2
F3
F4
F5
F6
F7
F8
$
54
#3
E
D
55
9>
6
R
T
Y
F
G
H
&
27
U
* 8
-
8
F9
61
9
0
0
J
K
L
TA
F10
P
יד
F11
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