There are two countries, Home and Foreign, who produce two goods, food and cloth, using only labour. The production possibilities frontier is QF = 1000 - 4QC for Home and QF*= 100 - 2QC* for Foreign. Which of the following COULD BE the consumption possibilities frontier of Foreign if the two countries engage in trade? Select one: a. DF* = 80 - 3DC* b. DF = 100 - 3DC* C. DF* = 150 3DC* d. DF* = 250 - 5DC*

Exploring Economics
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ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter28: International Trade
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There are two countries, Home and Foreign, who produce two goods, food and
cloth, using only labour. The production possibilities frontier is QF = 1000 - 4QC for
Home and QF*= 100 - 2QC* for Foreign. Which of the following COULD BE the
consumption possibilities frontier of Foreign if the two countries engage in trade?
Select one:
a. DF* = 80 - 3DC*
b. DF = 100 - 3DC*
C.
DF* = 150 3DC*
d. DF* = 250 - 5DC*
Transcribed Image Text:There are two countries, Home and Foreign, who produce two goods, food and cloth, using only labour. The production possibilities frontier is QF = 1000 - 4QC for Home and QF*= 100 - 2QC* for Foreign. Which of the following COULD BE the consumption possibilities frontier of Foreign if the two countries engage in trade? Select one: a. DF* = 80 - 3DC* b. DF = 100 - 3DC* C. DF* = 150 3DC* d. DF* = 250 - 5DC*
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