Suppose that Glacier and Denali 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 6 million pounds of corn for 6 million pounds of pistachios. This ratio of goods is known as the price of trade between Glacier and Denali. The following graph shows the same PPF for Glacier as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Glacier's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. PISTACHIOS (Millions of pounds) 48 42 36 PPF 30 24 18 12 6 0 0 6 ——— 12 Glacier 18 24 30 CORN (Millions of pounds) 36 42 48 Consumption After Trade (?)
Suppose that Glacier and Denali 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 6 million pounds of corn for 6 million pounds of pistachios. This ratio of goods is known as the price of trade between Glacier and Denali. The following graph shows the same PPF for Glacier as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Glacier's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. PISTACHIOS (Millions of pounds) 48 42 36 PPF 30 24 18 12 6 0 0 6 ——— 12 Glacier 18 24 30 CORN (Millions of pounds) 36 42 48 Consumption After Trade (?)
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section: Chapter Questions
Problem 8SQ
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ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning