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Assume there are only 2 countries in the world, Home country and Foreign country. They only produce 2 goods, Cheese and Wine. Given the
Assume there are only 2 countries in the world, Home country and Foreign country. They only produce 2 goods, Cheese and Wine. Given the following information: alc ac Answer the following questions. = = 3, alw = 4, L = 150 5, aw = 6, L = 200 a. Draw the World's PPF. b. Draw the RS (Relative Supply) curve of cheese. Label both Axis and mark all the important points. c. Suppose world relative demand takes the following form: demand for cheese/demand for wine = 4/5. Find the equilibrium and label it in your graph with EQ. d. Which country will benefit from the trade with the consumption from (c). e. What will be the most inefficient way to produce both good for the world, use a Figure and show the relevant numbers numerically.
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a The Worlds PPF Production Possibility Frontier can be drawn based on the given information The PPF represents the maximum possible combinations of C...Get Instant Access to Expert-Tailored Solutions
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