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Unformatted text preview: axis labeled with movies and books the x-intercepts for both PPFs the y-intercepts for both PPFs 2) Does one economy have the absolute advantage? If so which one? 3) Fill out this table (you dont have to do your work in the table): Nerdland Kutchnerland Opp Cost of 1 movie Opp Cost of 1 book 4) Which economy has the comparative advantage in making movies? Which has the comparative advantage in making books? 5) If there was trade, and we assume that one economy only produces books, while the other economy only produces movies, which economy will produce books, and which will only produce movies? 6) Now assume that there is trade, and the economy that specializes in movies exports 19 movies, and the economy that specializes in books exports 26 books. Fill out this table: No Trade Yes Trade Produce Consume Produce Export Import Consume Gains from Trade Nerdland Movies Nerdland Books Kutcherland Movies Kutcherland Books...
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- Spring '08