The production possibility curves of two countries are given below: $$\begin{array} { c }
{ \text { Legaland } } \quad\quad\quad\quad\quad { \text { Elmaland } } \
\begin{array} { | c | c | c | c | }
\hline \text { Chacolate } & \text { Textiles } & \text { Chaculate } & \text { Textiles } \
\hline 30 & 0 & 60 & 0 \
\hline 20 & 20 & 30 & 15 \
\hline 15 & 30 & 20 & 20 \
\hline 0 & 60 & 0 & 30 \
\hline
\end{array}\end{array}$$ Refer to the production possibility curves of the two countries. If they specialized and traded, which of the following is the largest bundle each country could have?
A)15 chocolate and 15 textiles
B)20 chocolate and 20 textiles
C)30 chocolate and 30 textiles
D)60 chocolate and 60 textiles

Question

The production possibility curves of two countries are given below: $$\begin{array} {   c   } 
  { \text { Legaland } } \quad\quad\quad\quad\quad  { \text { Elmaland } } \
\begin{array} { | c | c | c | c | } 
\hline \text { Chacolate } & \text { Textiles } & \text { Chaculate } & \text { Textiles } \
\hline 30 & 0 & 60 & 0 \
\hline 20 & 20 & 30 & 15 \
\hline 15 & 30 & 20 & 20 \
\hline 0 & 60 & 0 & 30 \
\hline
\end{array}\end{array}$$ Refer to the production possibility curves of the two countries. If they specialized and traded, which of the following is the largest bundle each country could have?
A)15 chocolate and 15 textiles
B)20 chocolate and 20 textiles
C)30 chocolate and 30 textiles
D)60 chocolate and 60 textiles

Quizplus · Accepted Answer

Legaland has a comparative advantage in textiles (it can produce them at a lower opportunity cost), while Elmaland has a comparative advantage in chocolate. By specializing and trading, they can achieve a bundle beyond their individual production possibilities, such as 30 chocolate and 30 textiles, by exploiting these comparative advantages.

The Production Possibility Curves of Two Countries Are Given Below