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Unformatted text preview: Put food on the y-axis. (f) Suppose Country A uses 12 hours to produce food and 12 hours to produce manufactured goods. Clearly label the resulting bundle (call it Bundle A ) produced on your PPF in part (e). Specifically how much food and how many manufactured goods are in Bundle A? (g) On the diagram in part (e) label a bundle that has the same amount of food as Bundle A but is unattainable . Call this Bundle B . (h) On the diagram in part (e) label a bundle that has the same amount of food as Bundle A that is attainable AND inefficient . Call this Bundle C . (i) Suppose the price of food in terms of manufactured goods, is one unit of food for 1 manufactured good. If this were the price set, would trade occur? Why or why not? (j) If Country B and Country A were to specialize in production and then trade, what good should Country A specialize in and why?...
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This note was uploaded on 01/28/2012 for the course ECON 1102 taught by Professor Someguy during the Fall '07 term at Minnesota.
- Fall '07