Freedonia has a comparative advantage in the production of , while Desonia has a comparative advantage in the production of . Suppose that Freedonia and Desonia specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of grain and million pounds of tea. Suppose that Freedonia and Desonia 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 12 million pounds of grain for 12 million pounds of tea. This ratio of goods is known as the terms of trade between Freedonia and Desonia. The following graph shows the same PPF for Freedonia as before, as well as its initial consumption at point A. Place a black point (+ symbol) on the graph to indicate Freedonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes.Freedonia 48 42 Consumption After Trade 38 30 24 TEA (Millions of pounds) 18 PPF 12 A 0 12 18 24 30 38 42 48 GRAIN (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 Freedonia, place a black point (+ symbol) on the following graph to indicate Desonia's consumption after trade. Desonia 43 Consumption After Trade 36 PPF 30 TEA (Millions of pounds) 24 12 12 6 12 24 30 36 42 43 GRAIN (Millions of pounds)True or False: Without engaging in international trader Freedonia and Desonia would have been able to consume at the after- trade consumption bundles. (Hint: Base this question on the answers you previously entered on this page.) 0 True O False 2. Consumption possibilities based on comparative advantage 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 Freedonia and Desonia. Both countries produce grain and tea, each initially (i.e., before specialization and trade) producing 18 million pounds of grain and 9 million pounds oftea, as indicated by the grey stars marked with the letter A.