Points on Production Possibilities FrontierCanada China Wheat Computers Wheat Computers A1500 900B10025 6060C5050 30120D075 0180 Draw the production possibilities graph for Canada and China and label all of the points on the graph. For which good does Canada have a comparative advantage?For which good does China have a comparative advantage?If Canada and China decide to specialize and trade, how many more computers and bushels of wheat would be available for consumption by both countries? Show the increase on your graphs. Canada and China decide to impose trade restrictions in the form of a tariff on the computers and wheat. What are the costs or benefits to the consumer, producer and government for each country?

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Answered: Points on Production Possibilities…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Points on Production Possibilities Frontier	Canada		China
Wheat	Computers		Wheat	Computers
A	150	0		90	0
B	100	25		60	60
C	50	50		30	120
D	0	75		0	180

Draw the production possibilities graph for Canada and China and label all of the points on the graph.

For which good does Canada have a comparative advantage?
For which good does China have a comparative advantage?
If Canada and China decide to specialize and trade, how many more computers and bushels of wheat would be available for consumption by both countries? Show the increase on your graphs.
Canada and China decide to impose trade restrictions in the form of a tariff on the computers and wheat. What are the costs or benefits to the consumer, producer and government for each country?

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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