Economics. Please answer all parts and fill in the blanks. In addition, please label the Trading possibilities Line and the Consumption after Trade. Thank you.

When a country specializes in the production of a good, this means that it can produce this good at a lower opportunity cost than its trading partner. Because of this comparative advantage, both countries benet when they specialize and trade with each other. The following graphs show the production possibilities frontiers (PPFs) for Candonia and Desonia. Both countries produce potatoes and coffee, each initially (that is, before specialization and trade) producing 12 million pounds of potatoes and 6 million pounds of coffee, as indicated by grey points (star symbols) labeled point A. Candonia Dasonia 32 32 23 23 ~Es' 24 % 24 C C 3 3 8 8 \"5 20 \"5 20 E '6 g 16 g 16 - E i u.r 12 u.r 12 m LIJ LL LL 3 8 t3 8 o o 4 4 0 I l | l 0 l l o 4 a 12 1o 20 24 25 32 u 4 a 12 1o 20 24 23 32 POTATOES (Millions of pounds) POTATOES (Millions of pounds) Candonia has a comparative advantage in the production of V , while Desonia has a comparative advantage in the production of v . If each fully specializes (that is, produces only the good for which each has a comparative advantage), the most the two countries can produce is 7 million pounds of coffee and 7 million pounds of potatoes. Suppose that Candonia and Desonia specialize and open up to international trade, and the terms of trade in the world market are 1 pound of potatoes for 1 pound of coffee. That is, Desonia is willing to sell Candonia 1 pound of potatoes in exchange for 1 pound of coffee, and Candonia is willing to sell Desonia 1 pound of coffee in exchange for 1 pound of potatoes. The countries decide to exchange 12 million pounds of potatoes for 12 million pounds of coffee. The following graph shows the same PPF for Candonia as before, as well as its initial consumption at point A. Use the green line (triangle symbol) to plot the trading possibilities line (TPL) for Candonia. Then place the black point (plus symbol) on the trading possibilities line to indicate Candonia's consumption after specialization and trade. Note: Dashed drop lines will automatically extend to both axes. Candonia 32 28 TPL 24 PPF 20 Consumption After Trade COFFEE (Millions of pounds) 16 12 8 4 A 8 12 16 20 24 28 32 POTATOES (Millions of pounds)The following graph shows the same PPF for Desonia as before, as well as its initial consumption at point A. As you did for Candonia, use the green line (triangle symbol) to plot the trading possibilities line (T PL) for Desonia. Then place the black point (plus symbol) on the trading possibilities line to indicate Desonia's consumption after specialization and trade. 6') Desonia 32 28 24 20 Consumption After Trade 16 12 PPF COFFEE (Millions of pounds) 0 4 a 12 1E 20 24 28 32 POTATOES (Millions of pounds) True or False: Without engaging in international trade, Candonia and Desonia would not have been able to consume at the after-trade consumption bundles. (Hint: Base your answer to this question on the answers you previously entered on this page.) Tru e - False