Microeconomics
13th Edition
ISBN: 9781337671590
Author: Arnold
Publisher: Cengage
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Question
Chapter 20, Problem 1QP
To determine
The position of world’s
Expert Solution & Answer
Explanation of Solution
Most probably, the world’s position in the production possibility frontier is below the frontier. This is because there is a decrease in world’s production and consumption due to the trade restrictive measures adopted by the nations, such as quota and tariff. The nations produce and consume more if there are no restrictions. This is because they would not get any benefit with trade restrictive measures.
Economics Concept Introduction
Production possibilities frontier: PPF refers to the different combinations of goods and services that can be produced efficiently with the given resources by a firm.
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