02 10 - HR MIN The production possibilities frontier (PPF) for Honduras and Brazil, representing hypothetical levels of production, are shown in the graphs. Assume that, without trade, each country is initially producing and consuming at point A on its PPF curve. Suppose these countries decide to trade. Each country will specialize in the production of the good for which it has a comparative advantage. Honduras Brazil 10 10 9 Co post-trade consumption Co post-trade consumption Bananas (thousand tons) Bananas (thousand tons) N 2 3 5 6 7 8 9 10 2 3 4 5 6 7 10 Steel (thousand tons) Steel (thousand tons) Which good will each country produce? Assume the countries agree to trade. The terms of trade are 6000 tons of bananas for 4000 tons of steel. Move the Honduras will produce both bananas and steel. post-trade consumption point for each country to reflect Brazil will produce both bananas and steel. their post-trade consumption. Honduras will produce bananas and Brazil will produce steel. Honduras will produce steel and Brazil will produce bananas