On the same graph, draw two PPFs: one for Arizona and one for North Dakota. Assume Arizona can produce 80 bales of hay or 20 pounds of sunflowers. North Dakota can produce 30 bales of hay or 120 pounds of sunflowers. For both states, points in between these limits are possible. Show how the total production of hay and sunflowers is greater with specialization than with self-sufficiency. Assume that the states trade 20 bales of hay for 30 pounds of sunflowers. Demonstrate the gains from trade with points on your graph.

1. Explain the opportunity costs of producing 1 bale of hay and 1 pound of sunflowers for each state.

2. Draw your own PPF graph on a piece of paper.

3. Clearly label all axes and lines. Include all relevant information.