The Only Two Countries in the World,Alpha and Omega,face the Following

question 59

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:

Nondeclarative Memory

A type of long-term memory that stores knowledge of procedures and how things are done, rather than explicit facts or events.

Bicycle

A human-powered, pedal-driven vehicle with two wheels attached to a frame, one behind the other.

Pedaling

A physical activity involving the use of legs to move pedals in a circular motion, commonly associated with bicycling or exercising on stationary bikes.

Semantic Memory

is a type of long-term memory involving the capacity to recall words, concepts, or numbers, which is essential for the understanding of language and the world around us.