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Question: economists believe that when two countries specialize and trade each...

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Economists believe that when two countries specialize and trade, each will be able to buy goods in which the other specializes at a lower cost than it would take to produce these goods itself The following graphs show the production possibilities frontiers (PPFs) for Freedonia and Sylvania. Both countries produce tea and potatoes, a each initially produces 8,000 pounds of tea and 8,000 pounds of potatoes before specialization and trade, as indicated by the grey stars marked A. Freedonia Sylvania TEA (Thousands of poundsl TEA (Thousands of poundsl 32 32 28 28 24 20 20 16 12 12 PPF PPF 4 8 12 16 20 24 28 32 4 8 12 16 20 2428 32 POTATOES IThousands of pounds) POTATOES IThousands of pounds] Freedonia has a comparative advantage in the production of comparative advantage in the production of specialize in the production of the goods in which each has a comparative advantage. Together, the two countries can produce , while Sylvania has a .Suppose that Freedonia and Sylvania pounds of tea and pounds of potatoes Suppose that Freedonia and Sylvania agree to trade. Each country focuses its resources on producing only the good for which it has a comparative advantage. The countries decide to exchange 12,000 pounds of potatoes for 12,000 pounds of tea

This graph shows the production possibilities frontier for Freedonia. Place a black point (X symbol) on the graph to indicate Freedonias consumption after trade. Dashed drop lines will automatically extend to both axes. TEA (Thousands of poundsl 32 Cons.with trade -ざ 28 24 20 16 12 PPFF 0 4 8 12 16 20 24 28 32 POTATOES (Thousands of pounds] Help Clear AllThis graph shows the production possibilities frontier for Sylvania. As you just did for Freedonia, place a black point (X symbol) on the diagram to indicate Sylvanias consumption after trade. TEA (Thousands of pounds 32 Cons, with trade 28 24 20 16 12 PFs 0 4 8 12 16 20 24 28 32 POTATOES (Thousands of pounds] Help Clear All have been able to consume at the after-trade consumption bundles you Sylvania and Freedonia found previously if they did not engage in international trade.

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