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Question #3 (16 points) China and Russia are trading partners. Both countries have the same amount of resources and can produce bulldozers and/ or trucks.
Question #3 (16 points) China and Russia are trading partners. Both countries have the same amount of resources and can produce bulldozers and/ or trucks. The production possibilities curves below show the combination of bulldozers and trucks that each country can produce. Use the information from the PPF graph to fill out the empty tables of the total amount of production for each country and the opportunity cost of producing each good. Trucks (units) China's PPC 50 Russia's 15 PPC 0 ullidozers 50 {units) Part A: use the PPF to fill out the table of the total production for each country. (4 points) Part B: Use vour answers in part A to determine the opportunity cost of producing trucks and bull dozers for each country. (4 points) Opportunity Cost of making 1: Part C: Which country has the comparative advantage in the production of trucks? Explain using numbers. (2 points) Part E: Now assume each country specializes in the production of the good 1n which it has a comparative advantage, and the terms of trade are 3 umits of bulldozers for 1 unit of trucks. Will Russia gain from trade? Explain. (2 points) the absolute advantage in the production of bulldozers? Explain using numbers_ (2 points)
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