The graphs below show the production possibility frontiers (PPFS) of Carolinia and Brodenstan, two countries that...

 

   

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The graphs below show the production possibility frontiers (PPFS) of Carolinia and Brodenstan, two countries that produce only coffee and bread. Initially-before specialization and trade-Carolinia produces 15,000 pounds of coffee and 10,000 loaves of bread, and Brodenstan produces 15,000 pounds of coffee and 10,000 loaves of bread, as indicated by the points on the graphs labelled "Initial consumption." Coffee (in thousands of pounds) 838238829 8 8 8 8 60 55 50 45 40 8 8 8 30 25 6 8 20 15 10 50 0 5 Carolinia Initial consumption 10 15 20 25 Consumption with trade 30 35 40 45 50 Coffee (in thousands of pounds) 06888 88 8 50 30 20 0 5 10 Brodenstan Initial consumption 15 20 Consumption with trade 25 30 35 40 451 50 a. Carolinia's opportunity cost of producing a pound of coffee is opportunity cost of producing a pound of coffee is producing a loaf of bread is bread is of coffee. of bread, and Brodenstan's of bread. Carolinia's opportunity cost of of coffee, and Brodenstan's opportunity cost of producing a loaf of b. Suppose Carolinia and Brodenstan begin trading. If each country specializes in the good in which it has a comparative advantage, Carolinia will produce and Brodenstan will produce c. Suppose Carolinia and Brodenstan agree to trade at a rate of one loaf of bread for one pound of coffee; specifically, they trade 25,000 loaves of bread for 25,000 pounds of coffee. Carolinia will then consume pounds of coffee and loaves of bread. loaves of bread. Brodenstan will consume pounds of coffee and V d. In the accompanying graphs, place the points labelled "Consumption with trade" at the appropriate coordinates to represent the consumption bundles of the countries with trade. The graphs below show the production possibility frontiers (PPFS) of Carolinia and Brodenstan, two countries that produce only coffee and bread. Initially-before specialization and trade-Carolinia produces 15,000 pounds of coffee and 10,000 loaves of bread, and Brodenstan produces 15,000 pounds of coffee and 10,000 loaves of bread, as indicated by the points on the graphs labelled "Initial consumption." Coffee (in thousands of pounds) 838238829 8 8 8 8 60 55 50 45 40 8 8 8 30 25 6 8 20 15 10 50 0 5 Carolinia Initial consumption 10 15 20 25 Consumption with trade 30 35 40 45 50 Coffee (in thousands of pounds) 06888 88 8 50 30 20 0 5 10 Brodenstan Initial consumption 15 20 Consumption with trade 25 30 35 40 451 50 a. Carolinia's opportunity cost of producing a pound of coffee is opportunity cost of producing a pound of coffee is producing a loaf of bread is bread is of coffee. of bread, and Brodenstan's of bread. Carolinia's opportunity cost of of coffee, and Brodenstan's opportunity cost of producing a loaf of b. Suppose Carolinia and Brodenstan begin trading. If each country specializes in the good in which it has a comparative advantage, Carolinia will produce and Brodenstan will produce c. Suppose Carolinia and Brodenstan agree to trade at a rate of one loaf of bread for one pound of coffee; specifically, they trade 25,000 loaves of bread for 25,000 pounds of coffee. Carolinia will then consume pounds of coffee and loaves of bread. loaves of bread. Brodenstan will consume pounds of coffee and V d. In the accompanying graphs, place the points labelled "Consumption with trade" at the appropriate coordinates to represent the consumption bundles of the countries with trade.