The Only Two Countries in the World, Alpha and Omega

question 20

Essay

The only two countries in the world, Alpha and Omega, face the following production possibilities frontiers.

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. How much of each good would the countries produce?
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 specialise in the good in which each has a comparative advantage. By specialising, 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.

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Definitions:

Recolor

The process of changing the color scheme or palette of an image, graphic, or design element.

Enhance

To improve the quality, value, or extent of something, such as images, audio, or video, through editing or processing.

Copy

To duplicate data or text from one location and place it in another location, without affecting the original source.

Entire Collection

Refers to all items or elements within a specific set or category, often used in the context of libraries, databases, or personal compilations.