In the figure below, AB is the production-possibility curve of Canada. The line PQ shows the price ratio of one bushel of wheat/bale of cotton. The international price ratio is 0.25 bushels of wheat/bale of cotton as shown by the line RS. I, and I, are two of the community indifference curves of Canada. After Canada engages in free trade, it will: Wheat (bushels) P. 80 60 50 25 Canada 65 Co 85 Cotton (bales) O produce and consume points not labeled in the graph. produce at point S, and consume at point Co produce and consume at point Co produce at point S, and consume at point C₁
In the figure below, AB is the production-possibility curve of Canada. The line PQ shows the price ratio of one bushel of wheat/bale of cotton. The international price ratio is 0.25 bushels of wheat/bale of cotton as shown by the line RS. I, and I, are two of the community indifference curves of Canada. After Canada engages in free trade, it will: Wheat (bushels) P. 80 60 50 25 Canada 65 Co 85 Cotton (bales) O produce and consume points not labeled in the graph. produce at point S, and consume at point Co produce and consume at point Co produce at point S, and consume at point C₁
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter33: International Trade
Section: Chapter Questions
Problem 2SCQ: Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40...
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