Suppose that two countries, Machineland and Farmland, have the following production possibility curves: a. Explain how these

Question:

Suppose that two countries, Machineland and Farmland, have the following production possibility curves:

a. Explain how these two countries can move from points A and C, where they currently are, to points B and D.

b. If possible, state by how much total production for the two countries has risen.

c. If you were a trader, how much of the gains from trade would you deserve for discovering this trade?

d. If the per-unit cost of production falls as output rises, how would the analysis change?

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Macroeconomics

ISBN: 978-1259663048

10th edition

Authors: David C. Colander

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Question Posted: Dec 05, 2018 05:40 AM

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Suppose that two countries, Machineland and Farmland, have the following production possibility curves: a. Explain how these

Question:

200 200 . B (50, 150) A (20, 100) 100 100 D (150, 50) C (150, 10) 100 200 100 200 Food Food MachIneland Farmland MachInes Machines

Step by Step Answer:

a The countries must realize that the only way to get to the new consumption combinations they must ...View the full answer

Macroeconomics

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