Suppose that Freedonia and Desonia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 4 million...

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Extracted text: Suppose that Freedonia and Desonia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 4 million pounds of grain for 4 million pounds of sugar. This ratio of goods is known as the price of trade between Freedonia and Desonia. The following graph shows the same PPF for Freedonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Freedonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. Freedonia 32 28 Consumption After Trade 24 PPF 20 16 12 4. 4 12 16 20 24 28 32 GRAIN (Millions of pounds) SUGAR (Millions of pounds)


Extracted text: The following graph shows the same PPF for Desonia as before, as well as its initial consumption at point A. As you did for Freedonia, place a black point (plus symbol) on the following graph to indicate Desonia's consumption after trade. Desonia 32 28 Consumption After Trade 24 20 16 PPF 8 4 12 16 20 24 28 32 GRAIN (Millions of pounds) True or False: Without engaging in international trade, Freedonia and Desonia would not have been able to consume at the after-trade consumption bundles. (Hint: Base this question on the answers you previously entered on this page.) True O False SUGAR (Millions of pounds)