Black to Assignment Maldenis Attempts 3 2 Keep the Highest 3/ 4 Specialization and trade Consumption After Teada 12 Whan a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production rontiers (FPFs] for Maldonia and Sylvania. Both countries produce grain and tes, each initially TEA [Milions of pounds (I.c., before specialization and trade) producing 6 million pounds of grain and 3 million pounds of tea, as indicated by the grey stars marked with the letter A. Maldonin Sylvania 12 GRAIN (Millions of pounds) The following graph shows the same PPF for Sylvania as before, as well as its Initial consumption at point A. PPF As you aid for Maldonia, place a black paint (plus symbol) on the following graph to Lodicate Swivesia's consumption after trade. TEA (Millions of pounds) TEA (Visions of pounds PPF Sylvania 10 12 16 10 12 14 14 GRAIN (Millions of pounds) GRAIN [Milions of pounds] Consumption After Trade 12 10 Maldonis has a comparative advantage in the production of grain . while Sylvania has a comparative advantage in the TEA [Millions of pounds production of tea that Maldonia and Sylvania specialize In the production of the goods In which each has a comparative advantage. After specialization, the two countries can produce a total of 12 million pounds of grain and 12 million pounds of Suppose that Maldonia and Sylvania agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 2 million pounds of grain for 2 million pounds of tes. This ratio of goods is known as the price of rade between Maldonia and Sylvania. GRAIN (Millions of pounds) The following graph shows the same OFF for Maldonia as before, as well as its initial consumption at point A. Place a black point (plus symbol on the graph to Indicate Maidonia's consumption after trade. True or False: Without engaging in International trade, Maldonis and Sylvania would have been able to consume at the after-trade consumption Note: Dashed drop lines will automatically extend to both axes. bundles. (Hint: Base this question on the answers you previously entered on this page.) True @ False Grade It Now Save & Continue