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:
Price
The amount of money required to purchase a good, service, or asset, determined by supply and demand dynamics.
Natural Monopoly
A market condition where a single firm can provide goods or services to an entire market at a lower cost than if there were multiple firms in the industry.
Antitrust Suits
Legal cases intended to prevent or penalize monopolies and ensure competition in the marketplace.
Average Cost
The total cost of production divided by the number of units produced.
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