Kneebonia imports grain from Elbonia, and Elbonia imports steel from Kneebonia. Which of the following would be most consistent with this? Elbonia has an opportunity cost of producing one ton of grain equal to 3 tons of steel, and Kneebonia has an opportunity cost of one ton of grain equal to 2 tons of steel. Elbonia has an opportunity cost of producing one ton of grain equal to 2 tons of steel, and Kneebonia has an opportunity cost of one ton of grain equal to 3 tons of steel. Both Elbonia and Kneebonia have identical PPFS.

Principles of Economics 2e
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Chapter33: International Trade
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Kneebonia imports grain from Elbonia, and Elbonia imports steel from Kneebonia. Which of the
following would be most consistent with this?
Elbonia has an opportunity cost of producing one ton of grain equal to 3 tons of steel, and Kneebonia has an
opportunity cost of one ton of grain equal to 2 tons of steel.
Elbonia has an opportunity cost of producing one ton of grain equal to 2 tons of steel, and Kneebonia has an
opportunity cost of one ton of grain equal to 3 tons of steel.
Both Elbonia and Kneebonia have identical PPFS.
Transcribed Image Text:Kneebonia imports grain from Elbonia, and Elbonia imports steel from Kneebonia. Which of the following would be most consistent with this? Elbonia has an opportunity cost of producing one ton of grain equal to 3 tons of steel, and Kneebonia has an opportunity cost of one ton of grain equal to 2 tons of steel. Elbonia has an opportunity cost of producing one ton of grain equal to 2 tons of steel, and Kneebonia has an opportunity cost of one ton of grain equal to 3 tons of steel. Both Elbonia and Kneebonia have identical PPFS.
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