The production possibility frontiers of Northland and Southland are given. Without trade, Northland produces and consumes 20 apples and 5 bananas and Southland produces and consumes 10 apples and 40 bananas. Could they increase their consumption bundle by optimizing production and trading? $$\begin{array} { c }
{ \text { Narthland } } \quad\quad\quad\quad{ \text { Sauthland } } \
\begin{array} { | c | c | c | c | }
\hline \text { Agples } & \text { Bananas } & \text { Agples } & \text { Bananas } \
\hline 30 & 0 & 30 & 0 \
\hline 20 & 5 & 20 & 20 \
\hline 15 & 10 & 10 & 40 \
\hline 0 & 15 & 0 & 60 \
\hline
\end{array}\end{array}$$

Question

The production possibility frontiers of Northland and Southland are given. Without trade, Northland produces and consumes 20 apples and 5 bananas and Southland produces and consumes 10 apples and 40 bananas. Could they increase their consumption bundle by optimizing production and trading? $$\begin{array} { c   } 
 { \text { Narthland } } \quad\quad\quad\quad{ \text { Sauthland } } \
\begin{array} { | c | c | c | c | } 
\hline \text { Agples } & \text { Bananas } & \text { Agples } & \text { Bananas } \
\hline 30 & 0 & 30 & 0 \
\hline 20 & 5 & 20 & 20 \
\hline 15 & 10 & 10 & 40 \
\hline 0 & 15 & 0 & 60 \
\hline
\end{array}\end{array}$$

Quizplus · Accepted Answer

By specializing and trading, Northland can produce 30 apples and Southland can produce 60 bananas. They can then trade to achieve a consumption bundle that includes 20 apples and 15 bananas for Northland and 10 apples and 45 bananas for Southland, increasing their total consumption.

The Production Possibility Frontiers of Northland and Southland Are Given