The diagram above shows the production possibilities frontier (PPF) for a country that produces guns (G) and butter (B). Most people in the country prefer guns, so in the absence of international trade, point A represents the combination of G and B that maximizes welfare. The slope of the PPF at point A is equal to -2, which is the slope if line B'
a.What is the opportunity cost of 1 ton of G before trade? What is the opportunity cost of 1 ton of B before trade?
B. Then, they could sell these extra tons of B in the world markets for $12,000, and use that revenue to buy 6 tons of
G. So, they could make 5 additional tons of G in the process.

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The Answer of The diagram above shows the production possibilities frontier (PPF) for a country that produces guns (G) and butter (B). Most people in the country prefer guns, so in the absence of international trade, point A represents the combination of G and B that maximizes welfare. The slope of the PPF at point A is equal to -2, which is the slope if line B'
a.What is the opportunity cost of 1 ton of G before trade? What is the opportunity cost of 1 ton of B before trade?
B. Then, they could sell these extra tons of B in the world markets for $12,000, and use that revenue to buy 6 tons of
G. So, they could make 5 additional tons of G in the process.

The Diagram Above Shows the Production Possibilities Frontier (PPF) for a Country