The two drop bar options are (potatoes, tea, neither potatoes nor tea, both potatoes and tea) The fallowing graph shows the saYne PPF for reesonia an befure, as well as its initial consumption at point A. Place a black point (plus symibol) an thegraph to indicate Freedonia's CEVISurption after trade.Note: Dashed drop lines will automatically extend to boti xes.FreedonlaConsumpaon Aher TradePPF12182442POTATOES Miions of pounds)The following graph shows the same PPF for Sylvania as before, as well as its initial consumption at point A.As you did for Freedonia, place a black point (plus symbol) on the folowing graptr to indicate Sylvanie's consumption after trade.SylvanlaConsumpnon After TradePPF1218243042POTATOES (Milions of pounds)True or False: Wilhout engaging in initernational trade, Freedunia and Sylvania woukl have been able to consume at the after-trade consumptionbundles. (Hint: Base this qustion on the ariswers you preyiously entered on this page.)O TrueO ralse(spuned o suauur)vauTEA (Milons of pouncs) 4. Specialization and tradeWhen 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 itsIstrading 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 Freedonia and Sylvania. Both countries produce potatoes and tea, eachinitially (i.e., before specialization and trade) producing 18 million pounds of potatoes and 9 million pounds of tea, as indicated by the grey starsmarked with the letter A.FreedoniaSylvania484842423636PPF3030242418PPF18121231116 12 18 24 30POTATOES (Millions of pounds)364212182430364248POTATOES (Millions of pounds)Freedonia has a comparative advantage in the production ofv, while Sylvania has a comparative advantage in theproduction ofSuppose that Freedonia and Sylvania specialize in the production of the goods in which each has acomparative advantage. After specialization, the two countries can produce a total ofmillion pounds of potatoes andmillion poundsof tea.Suppose that Freedonia and Sylvania agree to trade. Each country focuses its resources on producing only the good in which it has a comparativeadvantage. The countries decide to exchange 18 million pounds of potatoes for 18 million pounds of tea. This ratio of goods is known as the price oftrade between Freedonia and Sylvania.The following graph shows the same PPF for Freedonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on thegraph to indicate Freedonia's consumption after trade.Note: Dashed drop lines will automatically extend to both axes.TEA(MIlions of pounds)(spunod j0 suoiwyaL

Name: The two drop bar options are (potatoes, tea, neither potatoes nor tea,
Uploaded: 2022-12-02T21:52:30.000Z
Channel: Bartleby
Description: The two drop bar options are (potatoes, tea, neither potatoes nor tea, both potatoes and tea) The fallowing graph shows the saYne PPF for reesonia an befure, as well as its initial consumption at point A. Place a black point (plus symibol) an thegrap

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A country has a comparative advantage in producing the good which it produces at a lower opportunity…