The following diagrams show the production possibilities boundaries for Austria and Switzerland,for the production of bicycles and shoes. FIGURE 32-2
-Refer to Figure 32-2.If Austria and Switzerland engage in free trade with each other,it is likely that Switzerland will specialize in the production of ________ and Austria will specialize in the production of ________.

Question

The following diagrams show the production possibilities boundaries for Austria and Switzerland,for the production of bicycles and shoes.  FIGURE 32-2
-Refer to Figure 32-2.If Austria and Switzerland engage in free trade with each other,it is likely that Switzerland will specialize in the production of ________ and Austria will specialize in the production of ________.

Quizplus · Accepted Answer

According to the production possibilities boundaries, Switzerland has a comparative advantage in producing shoes while Austria has a comparative advantage in producing bicycles. Therefore, if they engage in free trade with each other, Switzerland will specialize in producing shoes and Austria will specialize in producing bicycles.

The Following Diagrams Show the Production Possibilities Boundaries for Austria