Exhibit 18-1 Production possibilities curves

-In Exhibit 18-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.If these two nations trade,Nabia should specialise in the production of:

Question

Exhibit 18-1 Production possibilities curves
 
-In Exhibit 18-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.If these two nations trade,Nabia should specialise in the production of:

Quizplus · Accepted Answer

According to the production possibilities curves, Nabia has a comparative advantage in producing wheat while Pada has a comparative advantage in producing corn. Therefore, if they specialize and trade, Nabia should produce and export wheat while importing corn from Pada. This will lead to a more efficient allocation of resources and higher overall output for both countries.

Exhibit 18-1 Production Possibilities Curves