Answer Happy

1. Specialization and trade When a country specializes in the production of a good, this means that it can produce this good at a lower opportunity cost than its trading partner. Because of this comparative advantage, both countries benefit when they specialize and trade with each other. The following graphs show the production possibilities frontiers (PPFS) for Candonia and Desonia. Both countries produce lemons and tea, each initially (1.e., before specialization and trade) producing 18 million pounds of lemons and 9 million pounds of tea, as indicated by the grey stars marked with the letter A. Candonia Desonia 45 42 30 36 30 30 24 24 18 PPF 18 12 12. TEA (Millions of pounds) 1 TEA (Millions of pounds) 6 PPF
CENGAGE Homework: International Trade (Ch 20); Candonia TEA (Millions of pounds) #2 #27 #2 30 18 PPF 6 6 0 TEA (Millions of pounds) 48 42 36 30 24 12 T 0 PPF Desonia 0 12 18 24 30 36 42 48 0 LEMONS (Millions of pounds) Candonia has a comparative advantage in the production of production of Suppose that Candonia and Desonia specialize comparative advantage. After specialization, the two countries can produce a total of tea. 42 6 12 18 24 36 30 LEMONS (Millions of pounds) 48 while Desonia has a comparative advantage in the in the production of the goods in which each has a million pounds of lemons and million pounds of Ơ
Suppose that Candonia and Desonia 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 18 million pounds of lemons for 18 million pounds of tea. This ratio of goods is known as the terms of trade between Candonia and Desonia. The following graph shows the same PPF for Candonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Candonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. ? Candonia G A x TEA (Millions of pounds) 2 8 30 18 PPF 12 P 1 Consumption After Trade
View History Bookmarks Window Help ng.cengage.com Bing Google Yahow Blackboard Learn 2011 Manchest.007-21988 Manches.007-213458 M CENGAGE MINDTAP Homework: International Trade (Ch 20) Note: Dashed drop lines will automatically extend to both axes Candonia Consumption Aer Trade . 4 " 24 LEMONS (Ms of pounds) The following graph shows the same PPF for Desonia as before, as well as its initial consumption at po * 80 888 25 F2 F FE W S TEA (Mon of pounds) **# 18 ppp 12 #3 $ 4 X5 % < 6 A E R T D F G Y & 7 H 8 = C U 8
Hory Bookmarks ngengega.com CENGAGE MINDIAF Homewers international Trade (Ch 201 The aggress the same for Desnis as before, we as a p De T PPF * TEA) RA 43 Y 2007-2 80 FF LEMON M S4 3: 24 in st LL 19 < 60 V E R S D F X CYR T 221 P & 87 80. 44 " Y G H U - DI ** - Z 3 ( 9 K U DO #
2 TEA (Mons of 12 16 24 30 36 42 4 LEMONS (Mons of pounds) True or False Without engaging in international trade, Candonia and Desonia would not have been able to consume at the after-trade consumption bundies. (Hint: Base this question on the answers you previously entered on this pape) True ⒸFalse Grade It Now Save & Continue Continue without saving F 2 A-Z