The following graph shows the same PPF for Desonia as before, as well as its initial consumption at point A. As you did for Freedom'a, place a black point (+ symbol) on the following graph to indicate Desonia-'5 consumption after trade. 6?) Desonia 56 - Consumption After Trade 43 PPF 40- 32 24- COFFEE {Millions of pounds) 16*- o a 13 24 32 4o 43 56 64 GRAIN (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.) 0 True 0 False 1. Specialization and trade When a country specializes in the production of a good, this means that it can produce this good at a lower opportunity cost than its trading partner. Because of this comparative advantage, both countries benefit when they specialize and trade with each other. The following graphs show the production possibilities frontiers (PPFs) for Freedonia and Desonia. Both countries produce grain and coffee, each initially (i.e., before specialization and trade) producing 24 million pounds of grain and 12 million pounds of coffee, as indicated by the grey stars marked with the letter A. (?) (? ) Freedonia Desonia 64 64 PPF COFFEE (Millions of pounds) COFFEE (Millions of pounds) PP LA 16 24 32 40 48 56 64 16 24 40 48 56 64 GRAIN (Millions of pounds) GRAIN (Millions of pounds) Freedonia has a comparative advantage in the production of , while Desonia has a comparative advantage in the production of . 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 of million pounds of grain and million pounds of coffee. 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 16 million pounds of grain for 16 million pounds of coffee. This ratio of goods is known as the terms of trade between Freedonia and Desonia.The following graph shows the same PPF for Freedonia as before, as well as its initial consumption at pointA. Place a black paint (+ symbol) on the graph to indicate Fieedonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. Fmdonla Consumption Aer Trade 24 PPF COFFEE (Millions of pounds) 16 o a 16 24 32 4a 4a 56 64 GRAIN (Millions of pounds)