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When two individuals produce efficiently and then make a mutually beneficial trade based on comparative advantage, a. they both obtain consumption outside their production possibilities frontier. b. they both obtain consumption inside their production possibilities frontier. c. one individual consumes inside her production possibilities frontier, while the other consumes outside hers. d. each individual consumes a point on her own production possibilities frontier.

BuyFind

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781337091985
BuyFind

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781337091985

Solutions

Chapter
Section
Chapter 3, Problem 3CQQ
Textbook Problem

When two individuals produce efficiently and then make a mutually beneficial trade based on comparative advantage,

a. they both obtain consumption outside their production possibilities frontier.

b. they both obtain consumption inside their production possibilities frontier.

c. one individual consumes inside her production possibilities frontier, while the other consumes outside hers.

d. each individual consumes a point on her own production possibilities frontier.

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