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  3. below please find the production possibilities frontiers ppfs of...

Question: below please find the production possibilities frontiers ppfs of...

Question details

. Below please find the production possibilities frontiers (PPFs) of Ghana and Spain.

Ghana PPF                                                                                        Spain PPF

Possible Combinations

Possible Combinations

Cars

T-shirts

Cars

T-shirts

0

8,000

0

12,000

100

6,000

100

9,000

200

4,000

200

6,000

300

2,000

300

3,000

400

0

400

0

  1. Given these PPFs, which country would you predict would specialize in each good? Why?
  2. Suppose a free trade deal is negotiated. What is the range of potential terms of trade?
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