Narrbegin 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

Narrbegin 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, Nabia should specialize in producing wheat and trade with Pada for corn. This way, both nations can benefit from trade and consume a combination of goods that lies outside their individual production possibilities curves.

Narrbegin Exhibit 18.1 Production Possibilities Curves