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Suppose Country a Has a Production Possibilities Frontier Such That 4x2+4y2=5004 x ^ { 2 } + 4 y ^ { 2 } = 500

Question 24

Multiple Choice

Suppose country A has a production possibilities frontier such that 4x2+4y2=5004 x ^ { 2 } + 4 y ^ { 2 } = 500 and country B has a production possibilities frontier such that x2+4y2=500x ^ { 2 } + 4 y ^ { 2 } = 500 and consumers in each country view x and y as perfect substitutes.Country B will produce


A) only x (= 500\sqrt { 500 }
) and trade for y.
B) only y (= 125\sqrt { 125 } ) and trade for x.
C) both x (= 20) and y (= 5) and trade x to get y.
D) both x (= 20) and y (= 5) and trade y to get x.

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