Visualize a PPF (Production Possibility Frontier/Curve) for two countries the United States and Taiwan. Both countries produce YO-YOs and Tennis Shoes. The PPF for the United States shows that on the X-Axis its Output for YO-YOs is 100 million (per year) and Y-Axis its Output for Tennis Shoes is 25 million (per year). The PPF for Taiwan shows that on the X-Axis its Output for YO-YOs is 20 million (per year) and Y-Axis its Output for Tennis Shoes is 10 million (per year). Refer to the above PPF descriptions. Inspection of the linear PPFs of both countries illustrated reveals that: Answers: A. The United States cannot benefit from trading with Taiwan. B. Taiwan has no comparative advantage. C. Taiwan has comparative advantage in production of tennis shoes. D. None of the above
Visualize a PPF (
The PPF for the United States shows that on the X-Axis its Output for YO-YOs is 100 million (per year) and Y-Axis its Output for Tennis Shoes is 25 million (per year).
The PPF for Taiwan shows that on the X-Axis its Output for YO-YOs is 20 million (per year) and Y-Axis its Output for Tennis Shoes is 10 million (per year).
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Refer to the above PPF descriptions. Inspection of the linear PPFs of both countries illustrated reveals that: |
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