Assume that country A and country B decide to use half of the resources in the p
ID: 1189344 • Letter: A
Question
Assume that country A and country B decide to use half of the resources in the production of each good. Indicate the points of the maximum output of each good on the graphs for each country as point A under such resource use.
Assume the two countries choose autarky and do not trade. What would be the total world production of popcorn and peanuts under the autarky?
Assume that each country decides to specialize in either popcorn or peanut based on its respective comparative advantage. Under the specialization, what is the total production of popcorn and peanuts?
Assume country A and B decide to trade 100 units of popcorn for 100 units of peanuts, show on the graphs the gain each country receives from trade. Label these points on the two graphs “B.”
popcorn 300 275 250 225 200 175 I50 popcon 300 275 250 200 125 75 50 25 75 s0 o0 125 150 175 200 25 50 73 100 125 150 173 200 225 peantsExplanation / Answer
Assume that country A and country B decide to use half of the resources in the p