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 Glacier has a comparative advantage in the production of trading partner. Then the country will specialize in the production of this good and trade it for other goods. of , while Denali has a comparative advantage in the production . Suppose that Glacier and Denali specialize in the production of the goods in which each has a comparative The following graphs show the production possibilities frontiers (PPFs) for Glacier and Denali. Both countries produce corn and lentils, each initially advantage. After specialization, the two countries can produce a total of million pounds of lentils and ( million pounds of corn. (i.e., before specialization and trade) producing 18 million pounds of corn and 9 million pounds of lentils, as indicated by the grey stars marked with the letter A. Suppose that Glacier and Denali 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 6 million pounds of corn for 6 million pounds of lentils. This ratio of goods is known as the price of trade between Glacier and Denali ? (? The following graph shows the same PPF for Glacier as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the Glacier Denali graph to indicate Glacier's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. ? PPF Glacier LENTILS ( Millions of pounds ) LENTILS ( Millions of pounds) Consumption After Trade 36 42 CORN ( Millions of pounds ) CORN ( Millions of pounds ) The following graph shows the same PPF for Glacier as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Glacier's consumption after trade The following graph shows the same PPF for Denali as before, as well as its initial consumption at point A. Note: Dashed drop lines will automatically extend to both axes. As you did for Glacier, place a black point (plus symbol) on the following graph to indicate Denali's consumption after trade. (? Glacier Denali 48 Consumption After Trade + PPF Consumption After Trade LENTILS (Millions of pounds) LENTILS (Millions of pounds) PPF N 30 36 42 CORN ( Millions of pounds ) 6 42 CORN (Millions of pounds ) True or False: Without engaging in international trade, Glacier and Denali 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