2- Provide a construction of the production possibilities frontier for each country. table of the opportunity cost for both countries. 3- Construct the opportunity cost table for both countries. 4- Conclude which country has a comparative advantage in which product and how international trade makes each country better off.

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains Rrom Trade
Section: Chapter Questions
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Consider two countries X and Y that can each produce 4 cars a year. A worker from country X can produce 10 tons of grain a year, whereas a worker from country Y can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers.

For this situation,

2- Provide a construction of the production possibilities frontier for each country. table of the opportunity cost for both countries.


3- Construct the opportunity cost table for both countries.


4- Conclude which country has a comparative advantage in which product and how international trade makes each country better off.

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