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For the following question, use the graphs below. Fls M utt Fi Jeff 9 Rabbits 2 Rabbits Suppose there are two people in the economy,
For the following question, use the graphs below. Fls M utt Fi Jeff 9 Rabbits 2 Rabbits Suppose there are two people in the economy, (Mutt and Jeff) and there are two goods that can be produced (Fish and Rabbits). The daily production possibility frontiers for both Mutt and Jeff are individually shown in the above graphs. Based on this information, identify whether each of the following would be true or false and briey explain your reasoning. A. If trade is impossible and both Mutt and Jeff want to consume 2 sh each, then Mutt will, at most, be able to produce and consume 3 rabbits each day in addition to the 2 sh and Jeff will, at most, be able to produce and consume 1 rabbit each day in addition to the 2 sh. B. If Mutt and Jeff are allowed to specialize and trade with each other and both consume 2 sh each, the maximum number of rabbits that they could collectively consume would be 9. C. If Mutt and Jeff specialize and trade according to comparative advantage, trading sh for rabbits on a 1-for-1 basis would make Jeff better off but make Mutt worse off relative to a no-trade case
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