Explain the production possibilities

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Reference no: EM133131562

A. Use data in the "production possibilities" table below to answer the following questions:

Country/Good

Beans

Typewriters

Nicaragua

10

20

Costa Rica

20

10

Assume that each country has the same labor endowment, so the numbers in the table above represent the amount that can be produced of a single good if all labor is devoted to producing that good (full specialization).  A country can produce a mix of the two goods if it uses its opportunity cost number to reduce 1 good and increase the other. Based on this, choose a production pattern for each country and specify how much of a good it will export in exchange for a certain number of the imported goods.  What is the country's total consumption of both goods after trade?

1990

Beans

Typewriter

Planning for trade

 

 

Nicaragua produces:

 

 

Costa Rica produces:

 

 

Actual trade

 

 

Nicaragua's imports & exports (specify which way and number)

 

 

Costa Rica's imports & exports

(specify which way and number)

 

 

Post trade

 

 

Nicaragua's consumption:

 

 

Costa Rica's consumption:

 

 

Reference no: EM133131562

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