Can this question be explained to me?

When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods.

The following graphs show the production possibilities frontiers (PPFs) for Maldonia and Sylvania. Both countries produce grain and coffee, each initially (i.e., before specialization and trade) producing 18 million pounds of grain and 9 million pounds of coffee, as indicated by the grey stars marked with the letter A.

Maldonia

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COFFEE (Millions of pounds)

GRAIN (Millions of pounds)

PPF

A

Sylvania

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COFFEE (Millions of pounds)

GRAIN (Millions of pounds)

PPF

A

Maldonia has a comparative advantage in the production of , while Sylvania has a comparative advantage in the production of . Suppose that Maldonia and Sylvania specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total ofmillionpounds of coffee andmillionpounds of grain.

Suppose that Maldonia and Sylvania agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 12 million pounds of grain for 12 million pounds of coffee. This ratio of goods is known as theprice of tradebetween Maldonia and Sylvania.

The following graph shows the same PPF for Maldonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Maldonia's consumption after trade.

Note: Dashed drop lines will automatically extend to both axes.

Maldonia

Consumption After Trade

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COFFEE (Millions of pounds)

GRAIN (Millions of pounds)

PPF

A

The following graph shows the same PPF for Sylvania as before, as well as its initial consumption at point A.

As you did for Maldonia, place a black point (plus symbol) on the following graph to indicate Sylvania's consumption after trade.

Sylvania

Consumption After Trade

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COFFEE (Millions of pounds)

GRAIN (Millions of pounds)

PPF

A

True or False: Without engaging in international trade, Maldonia and Sylvania would not have been able to consume at the after-trade consumption bundles. (Hint: Base this question on the answers you previously entered on this page.)

True

False