161 Prob Set 3


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Unformatted text preview: aw production possibilities frontiers for each country. Assuming that consumer preferences are the same in both countries, add indifference curves and relative price lines (without trade) to your PPF graphs. What do the slopes of the price lines tell you about the direction of trade? d. Allowing for trade between countries, redraw the graphs and include a “trade triangle” for each country. Identify and label the vertical and horizontal sides of the triangles as either imports or exports. 4. Suppose Russia opens to trade and i...
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This note was uploaded on 10/06/2013 for the course EC 161 taught by Professor Fusillo during the Fall '12 term at Tufts.

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