Maldonia Desonia 48 48 42 42 36 36 PPF 30 30 24 24 18 PPF 18 12 12 --- -- --- -- 6 6 12 18 24 30 36 42 48 6 12 18 24 30 36 42 48 GRAIN (Millions of pounds) GRAIN (Millions of pounds) Maldonia has a comparative advantage in the production of , while Desonia has a comparative advantage in the production of Suppose that Maldonia and Desonia specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of grain and million pounds c tea. Suppose that Maldonia and Desonia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 18 million pounds of grain for 18 million pounds of tea. This ratio of goods is known as the price of trade between Maldonia and Desonia. (spunod jo suojUW) VEL నీ వీ TEA (Millions of pounds)

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Maldonia
Desonia
48
48
42
42
36
36
PPF
30
30
24
18
PPF
18
12
12
A
6.
12
18
24
30
36
42
48
6.
12
18
24
30
36
42
48
GRAIN (Millions of pounds)
GRAIN (Millions of pounds)
Maldonia has a comparative advantage in the production of
while Desonia has a comparative advantage in the
production of
Suppose that Maldonia and Desonia specialize in the production of the goods in which each has a
comparative advantage. After specialization, the two countries can produce a total of
million pounds of grain and
million pounds of
tea.
Suppose that Maldonia and Desonia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative
advantage. The countries decide to exchange 18 million pounds of grain for 18 million pounds of tea. This ratio of goods is known as the price of
trade between Maldonia and Desonia.
TEA (Millions of pounds)
24
TEA (Millions of pounds)
Transcribed Image Text:Maldonia Desonia 48 48 42 42 36 36 PPF 30 30 24 18 PPF 18 12 12 A 6. 12 18 24 30 36 42 48 6. 12 18 24 30 36 42 48 GRAIN (Millions of pounds) GRAIN (Millions of pounds) Maldonia has a comparative advantage in the production of while Desonia has a comparative advantage in the production of Suppose that Maldonia and Desonia specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of grain and million pounds of tea. Suppose that Maldonia and Desonia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 18 million pounds of grain for 18 million pounds of tea. This ratio of goods is known as the price of trade between Maldonia and Desonia. TEA (Millions of pounds) 24 TEA (Millions of pounds)
The following graph shows the same PPF for Maldonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the
graph to indicate Maldonia's consumption after trade.
Note: Dashed drop lines will automatically extend to both axes.
Maldonia
48
42
Consumption After Trade
36
18
PPF
12
6.
12
18
24
30
36
42
48
GRAIN (Millions of pounds)
The following graph shows the same PPF for Desonia as before, as well as its initial consumption at point A.
As you did for Maldonia, place a black point (plus symbol) on the following graph to indicate Desonia's consumption after trade.
30
24
TEA (Millions of pounds)
Transcribed Image Text:The following graph shows the same PPF for Maldonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Maldonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. Maldonia 48 42 Consumption After Trade 36 18 PPF 12 6. 12 18 24 30 36 42 48 GRAIN (Millions of pounds) The following graph shows the same PPF for Desonia as before, as well as its initial consumption at point A. As you did for Maldonia, place a black point (plus symbol) on the following graph to indicate Desonia's consumption after trade. 30 24 TEA (Millions of pounds)
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