The following table shows the production possibilities for two hypothetical countries, Italia and Nire. Assume each country has a linear production possibilities curve. Use the table to answer the questions that follow. Italia Nire Guns Butter (Pounds) Butter Guns (Pounds) 6 0 8 0 4 4 6 1 2 8 4 2 0 12 2 3 0 4 has a comparative advantage in producing butter, whereas Consider a proposed trade of 2.5 pounds of butter for 2 guns. True or False: This trade would be mutually agreeable to both countries. ○ True O False has a comparative advantage in producing guns.
The following table shows the production possibilities for two hypothetical countries, Italia and Nire. Assume each country has a linear production possibilities curve. Use the table to answer the questions that follow. Italia Nire Guns Butter (Pounds) Butter Guns (Pounds) 6 0 8 0 4 4 6 1 2 8 4 2 0 12 2 3 0 4 has a comparative advantage in producing butter, whereas Consider a proposed trade of 2.5 pounds of butter for 2 guns. True or False: This trade would be mutually agreeable to both countries. ○ True O False has a comparative advantage in producing guns.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The following table shows the production possibilities for two hypothetical countries, Italia and Nire. Assume each country has a linear production
possibilities curve.
Use the table to answer the questions that follow.
Italia
Nire
Guns
Butter
(Pounds)
Butter
Guns (Pounds)
6
0
8
0
4
4
6
1
2
8
4
2
0
12
2
3
0
4
has a comparative advantage in producing butter, whereas
Consider a proposed trade of 2.5 pounds of butter for 2 guns.
True or False: This trade would be mutually agreeable to both countries.
○ True
O
False
has a comparative advantage in producing guns.
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