Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
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 Yosemite and Congaree. Both countries produce corn and basil, each initially (i.e., before specialization and trade) producing 18 million pounds of corn and 9 million pounds of basil, as indicated by the grey stars marked with the letter A. Yosemite Congaree Bb 48 42 42 36 36 PPF 30 30 24 24 BASIL (Millions of pounds) BASIL (Millions of pounds) 18 PPF 18 12 12 0 12 18 24 30 36 42 48 6 12 18 24 30 36 42 48 0 6 CORN (Millions of pounds) CORN (Millions of pounds)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

14th Edition

978-0132960649, 132960648, 132109174, 978-0132109178

Students also viewed these Economics questions