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Unformatted text preview: To produce 1 unit of Y, B has to use up 1 unit of f.
Represent the production possibility frontier for A and B.
Which country has an absolute advantage in producing X? Which country has an
absolute advantage in producing Y? Which country has a comparative advantage in
producing X? Which country has a comparative advantage in producing Y? Suppose
A and B like to consume as much of X as of Y. What is the optimal productionconsumption choice for A and B in autarchy? What is the optimal production choice
for A and B with trade? Is there only one consumption choice that is efficient with
trade? Is trade efficient? Why? X 1 Y...
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