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2. Figure 1 shows the PPF for a country that can produce oil, which is labor intensive, or televisions, which are capital intensive. The country
2. Figure 1 shows the PPF for a country that can produce oil, which is labor intensive, or televisions, which are capital intensive. The country is currently producing at point A and not trading with the rest of the world. With trade, the world price can be reprwented by slope of the straight line through Point A. Which of the following is a true statement? When this country produces the optimal amount with trade, (a) workers in this country will be better off. (b) capital owners in this country will be better off. (c) both factors of production will be better oif. (d) the income of factors of production will not change.
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