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Mexico and the United States can both produce food and toys. Mexico has 100 workers and the United States has 300 workers. If they do
Mexico and the United States can both produce food and toys. Mexico has 100 workers and the United States has 300 workers. If they do not trade, the United States consumes 10 units of food and 10 toys; Similarly, Mexico's consumption of food and toys without trade is 4 and 2, respectively. The following table shows how many workers are necessary to produce each good. Mexico United States Workers per unit of food 12.5 15 Workers per toy 25 15 In the absence of trade, how many units of food and toys can the United States produce? The United States can produce a maximum of 20 units of food or 20 toys. (Enter numeric responses using integers.) How many can Mexico produce? Mexico can produce a maximum of 8 units of food or 4 toys. Which country has a comparative advantage in producing food? Mexico Which country has a comparative advantage in producing toys? The United States . 1.) Use the line drawing tool to graph the production possibilities frontier for each country. Label the lines 'PPFUS' and 'PPFM'. 2.) Use the point drawing tool to indicate where the two produce without trade. Label the points 'eUS' and 'eM'. 3.) Use the line drawing tool to graph the production possibility frontier with trade. There will be two segments (PPFSegmenH and PPFSegment2)' Properly label the lines. 4.) Use the point drawing tool to show that both countries can benet from trade by indicating a point on the production possibilities frontier with trade that contains more food and at least the same number of toys or more toys and at least the same amount of food as without trade. Label this point 'e'. Carefully follow the instructions above, and only draw the required objects. Food 30 28 26 24 22 20 18 16 14 12 10 o N A o) m 2 4 6 8 10 12 14 16 18 20 22 24 26 Toys
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