Author Question: Refer to the production possibilities frontier in the figure above. If the country moves from point ... (Read 152 times)

jparksx · **on:** Jun 29, 2018

Refer to the production possibilities frontier in the figure above. If the country moves from point a to point c, the opportunity cost of the move is

A) 30 million capital goods.
B) 20 million capital goods.
C) 10 million capital goods.
D) 10 million consumption goods.

Question 2

The gains from trade that are possible when two countries have different opportunity costs for wheat and coffee are realized when

A) trade occurs and resources are reallocated within the two countries.
B) the two countries continue to produce the same quantities of wheat and coffee.
C) each country has an absolute advantage in one of the two commodities.
D) the demand curves in both countries shift inward.