Question
I want a step by step answer for this: Draw the PPFs of countries Alpha and Omega based on the information below If country Alpha
I want a step by step answer for this:
Draw the PPFs of countries Alpha and Omega based on the information below
If country Alpha puts all its resources in either one of the goods it can produce either 2500 units of popcorn or 500 units of peanuts while country Omega can produce either 600 units of popcorn or 1800 units of peanuts. Draw the PPFs of both countries.
Define Absolute and Comparative Advantage and point which country has what type of advantage and in which product.
Assume that each country decides to use half of its resources in the production of each good. Show these points on the graphs for each country as point A.
If these countries choose not to trade, what would be the total world production of popcorn and peanuts?
Now suppose that each country decides to specialize in the good in which each has a comparative advantage. By specializing, what is the total world production of each product now?
If they decide to trade what would be the equilibrium consumption points after trade? Show on the graphs the gain each country would receive from trade.
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