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The following table shows the amount of good A and good B that two countries could produce if they devoted all their resources to that

  1. The following table shows the amount of good A and good B that two countries could produce if they devoted all their resources to that good. Assume both countries have the same quantity of resources and the trade-off between good A and good B remains constant as resources are shifted from one good to another. Answer the questions below and show calculations where appropriate. (25 points)
    1. Draw a straight-line PPF graph for Canada.(5pt)

Canada India
Good A 600 500
Good B 950 1200

  1. Draw a straight-line PPF graph for India.(5pt)
  2. Which country has the comparative advantage in good A? In good B? Explain.(5pt)
  3. What is India's marginal opportunity cost of producing good A? Good B?(5pt)
  4. Based on the data given, what is the terms of trade range for good A in terms of units of good B?(5pt)

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