Figure 34-3

-In Figure 34-3, the solid lines represent the respective production possibilities curves for the United States and Mexico.Which graphs show the correct consumption possibilities curves (dashed lines) after an agreement is reached to trade 1 unit of wheat for 1 unit of petroleum?
A)(1) and (4)
B)(1) and (2)
C)(2) and (3)
D)(3) and (4)

Question

Figure 34-3
​ 
-In Figure 34-3, the solid lines represent the respective production possibilities curves for the United States and Mexico.Which graphs show the correct consumption possibilities curves (dashed lines) after an agreement is reached to trade 1 unit of wheat for 1 unit of petroleum?
A)(1) and (4) 
B)(1) and (2) 
C)(2) and (3) 
D)(3) and (4)

Quizplus · Accepted Answer

The consumption possibilities curve after trade should reflect the new combinations of goods that each country can consume, which would be expanded beyond their production possibilities due to the benefits of trade.

Figure 34-3 ​

Figure 34-3