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Suppose there are 20 million workers in Canada and that each of these workers can produce either 3 cars or 15 bushels of wheat in
Suppose there are 20 million workers in Canada and that each of these workers can produce either 3 cars or 15 bushels of wheat in a year.
- what is the opportunity cost of producing a car in Canada? What is the opportunity cost of producing a bushel of wheat in Canada? If the US's opportunity cost for cars was 4 bushels of wheat, and its opportunity cost for a bushel of wheat was 1/4 of a car, and both countries decided to trade, which country would specialize in cars and which country would specialize in wheat?
- Draw Canada's production possibilities frontier and show where it would produce if it decided to consume an equal number of cars and of bushels of wheat.
- How would it distribute its workers to produce the quantities in question 2.?
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