Salads (per hour) 30 Salads (per hour) 30+ 25+ 20 25 20 15 "으 15 10+ 10- 5+ 5 Lis PPF Joe's PPF 0 5 10 15 20 25 30 Smoothies (per hour) 0 5 10 15 20 25 30 Smoothies (per hour) (b) Joe's gains from trade (a) Liz's gains from trade The figure above shows the production possibilities frontiers (PPFs) for Liz and Joe. If they decide to trade salads for smoothies: O Liz should specialize in salads and Joe should specialize in smoothies. O Liz should specialize in smoothies and Joe should specialize in salads. O Liz should specialize in producing both since she has the same opportunity cost for each. O Joe should find another trading partner because he would have to sell fewer smoothies.

ome 3. Gains from trade ses Consider two neighboring island countries called Dolorium and Arcadia. They each have 4 million labor hours available per week that they can use to Mog and Study Tools produce jeans, rye, or a combination of both. The following table shows the amount of jeans or rye that can be produced using 1 hour of labor. tal Options lege Success Tips Jeans Rye A- Country (Pairs per hour of labor) (Bushels per hour of labor) reer Success Tips Dolorium 4 16 ENDED FOR YOU Arcadia 10 Initially, suppose Arcadia uses 1 million hours of labor per week to produce jeans and 3 million hours per week to produce rye, while Dolorium uses 3 million hours of labor per week to produce jeans and 1 million hours per week to produce rye. Consequently, Dolorium produces 12 million pairs of jeans and 16 million bushels of rye, and Arcadia produces 5 million pairs of jeans and 30 million bushels of rye. Assume there are no other countries ng Focused willing to trade goods, so, in the absence…

Macmillan Learn Suppose that Ned can produce either potato chips or computer chips. If he only produces potato chips he can produce 50 in a day. If he only produces computer chips, he can produce 25 in a day. Drag the endpoints of the line to plot his production possibilities frontier (PPF) on the graph. Potato Chips 50 45 40 35 30 25 20 15 10 Incorrect 5 O 0 5 10 15 20 25 30 Computer Chips 35 40 Ned's PPP 45 50 What is the opportunity cost of potato chip production in terms of computer chips? 4/3 0 0 0 1/2 50 25 2 3/4

SUVS (millions per year) 5 4 A 3 E 2 D C 0 2 3 5 boog & lo nuoma od) 6 ab (3 b bomb to wel od (CS nado bomb (A sd (CI (a Compact cars (millions per year) 19) The figure above shows the production possibilities frontier for a country. In order for it to produce at point E, the 20 woda el bul A) country would need to acquire more resources and/or more advanced technology. B) production of compact cars would need to decrease. C) production of SUVS would need to decrease. D) country would need to use its resources more efficiently. tide bo Did E) country would need to determine that compact cars and SUVs are equally important to it.