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Scenario: The Production of Wheat and Toys The table describes the production of two goods, wheat and toys, in country A and country B. Each country has a linear production possibility frontier with respect to its production of the two goods. The numbers in each column represent the total number of units each country could produce if it used all of its resources to produce the good.
-(Scenario: The Production of Wheat and Toys) Look at the scenario Production of Wheat and Toys. If each country specializes completely in the good for which it has the comparative advantage, which combination represents a maximum possible amount of total production of the two goods, given the specialization?

Question

Use the following to answer questions :
Scenario: The Production of Wheat and Toys  The table describes the production of two goods, wheat and toys, in country A and country B. Each country has a linear production possibility frontier with respect to its production of the two goods. The numbers in each column represent the total number of units each country could produce if it used all of its resources to produce the good.
-(Scenario: The Production of Wheat and Toys) Look at the scenario Production of Wheat and Toys. If each country specializes completely in the good for which it has the comparative advantage, which combination represents a maximum possible amount of total production of the two goods, given the specialization?

Quizplus · Accepted Answer

Country A has a comparative advantage in producing wheat, with a production possibility for 100 units of wheat and 0 units of toys, while country B has a comparative advantage in producing toys, with a production possibility for 0 units of wheat and 150 units of toys. Therefore, if they specialize completely in their comparative advantages, country A will produce 50 units of wheat and country B will produce 75 units of toys, resulting in a total production of 50 wheat and 75 toys. This is the maximum possible amount of total production of the two goods, given the specialization.

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