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Below, you are provided with Argentina's and Brazil's Production Possibilities Frontiers between shirts and pairs of shoes.

Below, you are provided with Argentina's and Brazil's Production Possibilities Frontiers between shirts and pairs of shoes. You will use these PPFs to identify the opportunity cost of producing an additional unit of each good in both countries, to determine which country has a comparative advantage in the production of each good, and to characterize the desired pattern of specialization.


PPFA depicts Argentina's PPF between shirts and pairs of shoes, and PPFB depicts Brazil's PPF between shirts and pairs of shoes. Both PPFs are linear, which implies that opportunity costs remain constant as you move along each PPF.

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Part 1: What is the opportunity cost of producing an additional shirt in Argentina?


              




Part 2: What is the opportunity cost of producing an additional shirt in Brazil?






Part 3: Which country has a comparative advantage in the production of shirts?




Part 4: What is the opportunity cost of producing an additional pair of shoes in Argentina?







Part 5: What is the opportunity cost of producing an additional pair of shoes in Brazil?







Part 6: Which country has a comparative advantage in the production of shoes?







Part 7: If Argentina and Brazil were to specialize their production of shirts and shoes and engage in trade, which country should produce shirts? Which country should produce shoes?

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