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-(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 bushels of wheat,while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.Each nation specializes completely,based on comparative advantage,and the price of 1 head of cattle equals the price of 2 bushels of wheat.If Jackson exports 120 bushels of wheat to Tahoe,then the new consumption point for Tahoe after trade is _____ bushels of wheat and _____ head of cattle.

Question

Use the following to answer question: 
-(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 bushels of wheat,while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.Each nation specializes completely,based on comparative advantage,and the price of 1 head of cattle equals the price of 2 bushels of wheat.If Jackson exports 120 bushels of wheat to Tahoe,then the new consumption point for Tahoe after trade is _____ bushels of wheat and _____ head of cattle.

Quizplus · Accepted Answer

Tahoe consumes 60 bushels of wheat and 80 head of cattle in autarky. After trade, Tahoe exports 120 bushels of wheat to Jackson. So, Tahoe's new consumption point is 60 + 120 = 180 bushels of wheat and 80 - (120/2) = 60 head of cattle.

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