Suppose that a country in the Classical model has the following production-possibilities frontier (PPF):

If, in autarky, the country is producing 700 computers and is located at point M on the PPF, the country would be producing __________ autos. If the country is now opened to trade at a terms of trade of 1 auto: 2 computers (or 1 computer: 0.5 auto), it would export __________.
A) 120; autos
B) 120; computers
C) 280; autos
D) 280; computers

Question

Suppose that a country in the Classical model has the following production-possibilities frontier (PPF):

If, in autarky, the country is producing 700 computers and is located at point M on the PPF, the country would be producing __________ autos. If the country is now opened to trade at a terms of trade of 1 auto: 2 computers (or 1 computer: 0.5 auto), it would export __________.
A) 120; autos 
B) 120; computers 
C) 280; autos 
D) 280; computers

Quizplus · Accepted Answer

The Answer of Suppose that a country in the Classical model has the following production-possibilities frontier (PPF):

If, in autarky, the country is producing 700 computers and is located at point M on the PPF, the country would be producing __________ autos. If the country is now opened to trade at a terms of trade of 1 auto: 2 computers (or 1 computer: 0.5 auto), it would export __________.
A) 120; autos 
B) 120; computers 
C) 280; autos 
D) 280; computers

Suppose That a Country in the Classical Model Has the Following