What is the marginal rate of transformation of wheat

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Reference no: EM13200165

Assume Nebraska and Virginia each have 100 acres of farmland. The following table gives hypothetical figures for yield per acre in the two states:

Nebraska Virginia
Wheat 12 15
Cotton 6 10

A) Who has the absolute advantage in the production of cotton? Who has the comparative advantage in the production of wheat?

B) In this exercise, you will find actual points on the combined PPC of the two states. For each of the following values of one good, calculate the maximum amount of the other good that the two countries could produce working together.

Wheat Cotton
360
200
1300
1500

C) In Virginia, what is the marginal rate of transformation between wheat and cotton?

Reference no: EM13200165

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