If country A uses all of its resources efficiently, it can produce a maximum of 100 units of good X. If country A uses all of its resources efficiently, it can produce a maximum of 150 units of good Y. If country B uses all of its resources efficiently, it can produce a maximum of 75 units of good X. If country B uses all of its resources efficiently, it can produce a maximum of 125 units of good Y. Both countries have (linear) straight line PPFs. If these countries were going to trade after specializing in their respective comparative advantages, which of the following trades would be considered to be mutually beneficial where BOTH countries gain from trade (and are strictly better off than in autarky, the situation where they both self-reliant and do not trade with one another)? trade at a rate of 3X for 4Y trade at a rate of 2X for 3Y trade at a rate of 5X for 8Y trade at a rate of 3X for 5Y
If country A uses all of its resources efficiently, it can produce a maximum of 100 units of good X. If country A uses all of its resources efficiently, it can produce a maximum of 150 units of good Y.
If country B uses all of its resources efficiently, it can produce a maximum of 75 units of good X. If country B uses all of its resources efficiently, it can produce a maximum of 125 units of good Y.
Both countries have (linear) straight line PPFs. If these countries were going to trade after specializing in their respective
Opportunity cost is the value of the best alternative that must be given up when a choice is made.
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