The following graph shows the same PPF for Desonia as before, as well as its initial consumption at point A. As you did for Freedonia, place a black point (plus symbol) on the following graph to indicate Desonia's consumption after trade. Desonia 16 4 Consumption After Trade 12 PPF 10 TEA (Millions of pounds) A N 2 6 8 10 12 14 16 LEMONS (Millions of pounds) True or False: Without engaging in international trade, Freedonia and Desonia would have been able to consume at the after-trade consumption bundles. (Hint: Base this question on the answers you previously entered on this page.)Attempts 2 Keep the Highest 2 / 4 4. Specialization and trade When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Freedonia and Desonia. Both countries produce lemons and tea, each initially (i.e., before specialization and trade) producing 6 million pounds of lemons and 3 million pounds of tea, as indicated by the grey stars marked with the letter A. ? (?) Freedonia Desonia 16 16 14 14 12 PPF 12 10 10 TEA (Millions of pounds) 00 TEA (Millions of pounds) PPP A 2 N 16 6 8 10 12 14 16 4 8 12 2 4 2 6 10 14:: 3 a 10 a 9. 1 \\. ._ o 8 \"6 \\\\ E 6 E 6 l 4 A E 4 \\ A 2 m m m m if 2 Q' a x l l l l o #ll-Tq .lll'l o 2 4 6 8 10 12 14 16 o 2 4 6 8 10 12 14 16 LEMONS (Millions of pounds) LEMONS (Millions of pounds) Freedonia has a comparative advantage in the production of v , while Desonia has a comparative advantage in the production of V . Suppose that Freedonia and Desonia specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total ME: million pounds of lemons and [j million pounds of tea. Suppose that Freedonia and Desonia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 4 million pounds of lemons for 4 million pounds of tea. This ratio of goods is known as the price of trade between Freedonia and Desonia. The following graph shows the same PPF for Freedonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Freedonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. @ Freedonia mework (Ch 03) Desonia 16 -+ 14 Consumption After Trade 12 PPF 10 TEA (Millions of pounds) A N 0 6 10 12 14 16 LEMONS (Millions of pounds) True or False: Without engaging in international trade, Freedonia and Desonia would have been able to consume at the after-trade consumption bundles. (Hint: Base this question on the answers you previously entered on this page.) O True O False Grade It Now Save & Continue Continue without savingThe following graph shows the same PPF for Freedonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Freedonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. Freedonia 16 14 Consumption After Trade 12 10 CO TEA (Millions of pounds) 6 PPF 4 N 8 10 12 14 16 LEMONS (Millions of pounds) The following graph shows the same PPF for Desonia as before, as well as its initial consumption at point A. As you did for Freedonia, place a black point (plus symbol) on the following graph to indicate Desonia's consumption after trade