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:
°F
A unit of temperature measurement on the Fahrenheit scale.
Cutaneous Absorption
The process by which the skin absorbs substances, including creams, lotions, or medications applied topically.
Absorption
The process by which substances are taken up or assimilated into the body or into cells.
Disease Transmission
The process by which infectious diseases spread from one individual to another, through direct contact, vectors, or environmental means.
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