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2. Swedish and Danish workers can each produce 4 capital goods a year. A Swedish worker can produce 10 tonnes of grain a year, whereas

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2. Swedish and Danish workers can each produce 4 capital goods a year. A Swedish worker can produce 10 tonnes of grain a year, whereas a Danish worker can produce 5 tonnes of grain a year. To keep things simple, assume that each country has 100 million workers. a) For this situation ll in the following table: Workers needed to make: Amount of cars or grain produced in a year by 100 million workers One car per year One tonne of Tonnes of grain per year grain b) Graph the production possibilities frontier of the Swedish and Danish economies. c) For Sweden, what is the opportunity cost of a car? Of grain? For Denmark, what is the opportunity cost of a car? Of grain? Put this information in the following table: 0p . ortunity cost of: 1 car 1 tonne of grain in terms of _rain _iven u I in terms of cars iven u d) Which country has an absolute advantage in producing capital goods? In producing grain? e) Which country has a comparative advantage in producing capital goods? In producing grain? f) Without trade, half of each country's workers produce capital goods and half produce grain. 'What quantities of capital goods and grain does each country produce? g) Starting from a position without trade, give an example in which trade makes each country better off

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