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Suppose that in autarky, the U.S. is at point A, producing and consuming 500 Corn and 100 Blankets. in autarky, Mexico is at point B,
Suppose that in autarky, the U.S. is at point A, producing and consuming 500 Corn and 100 Blankets. in autarky, Mexico is at point B, producing and consuming 300 Corn and 150 Blankets. Mark points A and B in the graph from part 2. According to the law of comparative advantage. If each country specialized in one production. What product will U.S. produce and how much is production. What product will Mexico produce and how much is production? After part 5, if U.S. produces 1000 Corn and continue to consume 500 Corn, U.S. will now have 500 Corn to trade for Blankets. If the \"exchange rate\" is 13 = 3.33C (or, 1C = .3B), how many Blankets can the U.S. get in exchange for 500 Corn? Plot the U.S. new consumption point in the graph from part 2. Is the point in or outside of its PPF? After specialization, if Mexico wants to continue to consume 150 Blankets, they will now have 150 Blankets to trade for Corn. If the \"exchange rate\" is 13 = 3.33C (or, IE = .33), how much corn can Mexico get in exchange for 150B? Plot the Mexico new consumption point in the graph from part 2. Is the point in or outside of its PPF
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