Suppose that each worker in the Foreign country can produce two cars or three TVs. Assume that
Question:
a. Graph the production possibilities frontier for the Foreign country.
b. What is the no-trade relative price of cars in Foreign?
c. Using the information provided in Problem 2 regarding Home, in which good does Foreign have a comparative advantage and why?
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Related Book For
International Economics
ISBN: 978-1429278447
3rd edition
Authors: Robert C. Feenstra, Alan M. Taylor
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