The following shows the Production possibilities tables for two countries, Latalia and Trombonia: Refer to the above tables.If these two nations specialize on the basis of comparative advantage:

Question

The following shows the Production possibilities tables for two countries, Latalia and Trombonia:  Refer to the above tables.If these two nations specialize on the basis of comparative advantage:

Quizplus · Accepted Answer

Based on the Production Possibility Tables, Latalia has a comparative advantage in producing beans, as they can produce 8 units of beans for every unit of pork forgone, while Trombonia can only produce 2 units of beans for every unit of pork forgone. Conversely, Trombonia has a comparative advantage in producing pork, as they can produce 2 units of pork for every unit of beans forgone, while Latalia can only produce 0.5 units of pork for every unit of beans forgone.

Therefore, Latalia will specialize in producing beans and Trombonia will specialize in producing pork. This will result in both countries being able to consume more of both goods, as they can trade with each other based on their comparative advantages.

The Following Shows the Production Possibilities Tables for Two Countries