Suppose South Africa produces only trucks and camcorders. The resources that are used in the production of these two goods are specialized-that is, some inputs are more suitable for producing trucks than for producing camcorders, whereas others are more suitable for producing camcorders than trucks. The shape of South Africa's production possibilities frontier (PPF) should reflect the fact that as South Africa produces more camcorders and fewer trucks, the opportunity cost of producing each additional camcorder [Select ] The following graphs show two possible PPFs for South Africa's economy: a straight-line PPF (Graph 1) and a bowed-out PPF (Graph 2). TRUCKS PPF 1 Graph 1 CAMCORDERS ×4 TRUCKS PPF 2 Graph 2 CAMCORDERS 8 Based on the previous description, the tradeoff South Africa faces between producing camcorders and trucks is best represented by [Select] On graphs 1 and 2, point A depicts a combination of trucks and camcorders that lies in the [Select] region, and point B depicts a combination of trucks and

Suppose South Africa produces only trucks and camcorders. The resources that are used in the production of these two goods are specialized-that is, some inputs are more suitable for producing trucks than for producing camcorders, whereas others are more suitable for producing camcorders than trucks. The shape of South Africa's production possibilities frontier (PPF) should reflect the fact that as South Africa produces more camcorders and fewer trucks, the opportunity cost of producing each additional camcorder [Select ] The following graphs show two possible PPFs for South Africa's economy: a straight-line PPF (Graph 1) and a bowed-out PPF (Graph 2). TRUCKS PPF 1 Graph 1 CAMCORDERS ×4 TRUCKS PPF 2 Graph 2 CAMCORDERS 8 Based on the previous description, the tradeoff South Africa faces between producing camcorders and trucks is best represented by [Select] On graphs 1 and 2, point A depicts a combination of trucks and camcorders that lies in the [Select] region, and point B depicts a combination of trucks and

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter2: Economic Tools And Economic Systems

Section: Chapter Questions

Problem 3.5P

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The accompanying Production Possibilities Frontiers (PPF) represent hypothetical levels of production for Honduras and Brazil. Assume the two countries are initially producing and consuming in autarky at point A on each of their PPFs. Suppose these countries decide to trade. Each country will specialize in the production of the good for which it has a comparative advantage. a. What will each country produce? a. Honduras will produce both goods. b. Brazil will produce both goods. c. Honduras will produce bananas and Brazil steel. d. Honduras will produce steel and Brazil bananas. b. Suppose each country specializes in the production of the good for which it has a comparative advantage, and they trade at a price of of 4,000 tons of steel for 6,000 tons of bananas. Place the points labeled "Post Trade Consumption" to show the amounts of bananas and steel each country will have to consume after they trade. (look at image)
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Please answer the following
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