The Only Two Countries in the World, Alpha and Omega

question 299

Essay

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.

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Definitions:

Dog Trainer

A professional who applies behavior analysis to teach, train, or assist dogs to obey commands or undertake specific tasks.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without prior conditioning.

Unconditional Statement

A statement that is absolute and does not depend on any conditions or variables for its validity.

Stimulus

Any event or situation that evokes a response from an organism.