The only two countries in the world, Alpha and Omega, face the following production possibilities frontiers.
Alpha's Production Possibilities Frontier
Omega's Production Possibilities Frontier 
a.Assume that each country decides to use half of its resources in the production of each good. Show these points on the graphs for each country as point A.
b.If these countries choose not to trade, what would be the total world production of popcorn and peanuts?
c.Now suppose that each country decides to specialize in the good in which each has a comparative advantage. By specializing, what is the total world production of each product now?
d.If each country decides to trade 100 units of popcorn for 100 units of peanuts, show on the graphs the gain each country would receive from trade. Label these points B.
Definitions:
Conditioned Stimulus
A stimulus that initially has no response connected to it but gains the power to evoke a response through association with an unconditioned stimulus.
Conditioning Theory
A psychological theory that explains learning as a process where behavior is modified through reinforcement or punishment.
Conditioned Stimulus
A previously neutral stimulus that, after being associated with an unconditioned stimulus, evokes a conditioned response.
Contingency Theory
A theory in the field of organizational behavior that posits the effectiveness of a leadership style is contingent upon the context and that no one style is best in all situations.
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