gage.com/staticb/ui/evo/index.html?deploymentld=5673672202501852389526170788&elSBN=9781337096607&id=68468297... * CENGAGE | MINDTAP Q Sear Homework Assignment 1 (Ch 03) Back to Assignment Attempts: 3 0.5 Keep the Highest: 3/ 4 4. Specialization and trade When 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 possibilities frontiers (PPFs) for Candonia and Desonia. Both countries produce potatoes and tea, each initially (i.e., before specialization and trade) producing 6 million pounds of potatoes and 3 million pounds of tea, as indicated by the grey stars marked with the letter A. ? (?) Candonia Desonia 16 16 14 llions of pounds) lions of pounds) 12 PPP 10 co re to search e x / ENG DELL PrtSer Insert Delete F7 F8 F9 F10 F11 F12. F1 F2 F3 144 FS F6 @ # $ A Backspa 7 N 3 4 5 6 7 O Q W E R T Y U O P S D F G H J K L ". . . . U Z X C B N M Alt Ctr Homegage.com/staticb/ui/evo/index.html?deploymentld=5673672202501852389526170788&elSBN=9781337096607&id=68468297... * CENGAGE | MINDTAP Q Sear Homework Assignment 1 (Ch 03) Back to Assignment Attempts: 3 0.5 Keep the Highest: 3/ 4 4. Specialization and trade When 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 possibilities frontiers (PPFs) for Candonia and Desonia. Both countries produce potatoes and tea, each initially (i.e., before specialization and trade) producing 6 million pounds of potatoes and 3 million pounds of tea, as indicated by the grey stars marked with the letter A. ? (?) Candonia Desonia 16 16 14 llions of pounds) lions of pounds) 12 PPP 10 co re to search e x / ENG DELL PrtSer Insert Delete F7 F8 F9 F10 F11 F12. F1 F2 F3 144 FS F6 @ # $ A Backspa 7 N 3 4 5 6 7 O Q W E R T Y U O P S D F G H J K L ". . . . U Z X C B N M Alt Ctr HomeWhen A Count x gage.com/staticb/ui/evo/index.html?deploymentld=5673672202501852389526170788&elSBN=9781337096607&id=68468297... Q CENGAGE | MINDTAP Homework Assignment 1 (Ch 03) Candonia has a comparative advantage in the production of_ , while Desonia has a comparative advantage in the production of . Suppose that Candonia 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 potatoes and million pounds of tea. Suppose that Candonia 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 4 million pounds of potatoes for 4 million pounds of tea. This ratio of goods is known as the price of trade between Candonia and Desonia. The following graph shows the same PPF for Candonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Candonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. (? ) Candonia 16 .+ 14 Consumption After Trade 12 to search M e 6 4x / ENG DELL F10 Insert F2 F8 F9 F12. Prtser De F3 F4 F6 F7 14 F5 a o A Ba N 3 4 5 6 V 11 Q W E R T Y U O P ". .. S D F G H K .V Z X B N M CtrlCENGAGE | MINDTAP Homework Assignment 1 (Ch 03) Candonia 16 14 Consumption After Trade 12 TEA (Millions of pounds) PPF A N 10 12 14 16 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, place a black point (plus symbol) on the following graph to indicate Desonia's consumption after trade. to search U M 9 e DELL F6 F7 F8 F9 F10 F11 ... F12 .. PrtScr Inse F2 F3 F4 F5 144 a # K 1 2 B 4 5 6 7 8 O Q W E R T Y U O P A S D F G H K Z X B N M