BD and India are both producers of garments and rice. Garments require labor and capital, while rice requires labor and land. Assume that labor is mobile between sectors, but not between countries. Given the relative opportunity costs of garments and rice in each country, India exports rice to BD and Imports garments from BD. Suppose the amount of land available for rice cultivation in India grows. How will it affect India's PPF? What will be the impact of this development on Indian labor, Indian landowners and Indian garment factory owners? Use diagrams to explain if necessary.

Economics (MindTap Course List)
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ISBN:9781337617383
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Chapter2: Production Possibilities Frontier Framework
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BD and India are both producers of garments and rice. Garments require labor and capital, while rice requires labor and land. Assume that labor is mobile between sectors, but not between countries. Given the relative opportunity costs of garments and rice in each country, India exports rice to BD and Imports garments from BD. Suppose the amount of land available for rice cultivation in India grows. How will it affect India's PPF? What will be the impact of this development on Indian labor, Indian landowners and Indian garment factory owners? Use diagrams to explain if necessary.

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