GRAPH Each Combined Lumber COMBINED 350 175 A 300 150 Rice Production Possibilities for Malaysia Production Possibilities for Canada Combined Production Possibilities O Total Production SETTINGS Reset FOR CALCULATIONSantage Interactive Graphs i Saved 150 300 Rice Production Possibilities for Malaysia Production Possibilities for Canada Combined Production Possibilities Total Production SETTINGS Reset FREE CALCULATIONS Production Possibilities Initial Production Lumber New Production Rice (0 - 320 ft3) (0 - 320 tons) Lumber Rice Lumber Rice Malaysia 200 or 120 Canada 150 or 180 Malaysia 100 60 100 60 Labor Lumber Rice Canada 75 90 75 90 (0 - 100%) (%) Malaysia (Pt. A) 50 50 Total 175 150 175 150 Canada (Pt. B) 50 50 structions: Select the Combined button above the graph to show all production possibilities and production on a single graph.Advantage Interactive Graphs i Saved Labor Lumber Rice Canada 75 (0 - 100%) 90 (%) 75 90 Malaysia (Pt. A) 50 50 Total 175 150 175 150 Canada (Pt. B) 50 50 Instructions: Select the Combined button above the graph to show all production possibilities and production on a single graph. Interpret this graph to answer the following question. It may help to experiment with the Labor settings. Use the following settings for the production possibilities for the two countries. Lumber Rice Malaysia 200 120 Canada 150 180 The Combined graph shows a dotted line that represents the combined production possibilities for the two countries. How must each country allocate its labor so that the red point, showing total production, is on the bend of this combined production possibilities function? Malaysia must allocate % of its labor to lumber production. Canada must allocate % of its labor to lumber production. This is because Malaysia can produce lumber at a lower opportunity cost v| and each country's production possibilities curve is linear.Problem 26-03 (algo) The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative D and for the United States is alternative S. China Production Possibilities Product B CD F Apparel 80, 000 64 , 000 48 , 000 32 , 000 16, 000 Chemicals (tons) 0 32 64 96 128 160 U.S. Production Possibilities Product R S U V W Apparel 240, 000 192,000 144, 000 96 , 0000 48 , 000 Chemicals (tons) 48 96 144 192 240 Instructions: Enter your answers as whole numbers a. Are comparative-cost conditions such that the two countries should specialize? Yes If so, what product should each produce? China should produce chemicals The United States should produce |apparel b. What is the total gain in apparel and chemical output that would result from such specialization? a. Are comparative-cost conditions such that the two countries should specialize? Yes If so, what product should each produce? China should produce chemicals The United States should produce |apparel b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: 16000 units Chemicals: ton(s) c. What are the limits of the terms of trade? 1000 units of apparel for 1 ton of chemicals and |1000 units of apparel for 2 tons of chemicals. Suppose that the actual terms of trade are 1,000 units of apparel for 1/2 tons of chemicals and that 32,000 units of apparel are exchanged for 48 tons of chemicals. What are the gains from specialization and trade for each nation? The United States ~ has a gain of units of apparel. China has a gain of ton(s) of chemicals.