Figure 3-8
Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier
-Refer to Figure 3-8.If Belgium and Latvia each spends all its time producing the good in which it has a comparative advantage and the countries agree to trade 7 waffles for 5 pancakes,then Belgium will consume

Question

Figure 3-8
Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier  
-Refer to Figure 3-8.If Belgium and Latvia each spends all its time producing the good in which it has a comparative advantage and the countries agree to trade 7 waffles for 5 pancakes,then Belgium will consume

Quizplus · Accepted Answer

Belgium has a comparative advantage in producing waffles, so it will produce and export waffles. Latvia has a comparative advantage in producing pancakes, so it will produce and export pancakes. If Belgium and Latvia agree to trade 7 waffles for 5 pancakes, then Belgium will consume 7 waffles and 5 pancakes, and Latvia will consume 5 waffles and 5 pancakes.

Figure 3-8 Belgium's Production Possibilities Frontier Latvia's Production Possibilities Frontier