Advanced Placement (AP), 16.10.2020 09:01 biglue19

Assume that the United States and India enjoy constant opportunity costs and the production possibilities shown in the table. Assume that the United States and India enjoy constant opportunity costs and the production possibilities shown in the table. [ show ALL parts of the math from beginning to end.]

a) Which country has an absolute advantage in pounds of peanuts? [calculate your math step by step / write the equations]

b) Use the table to calculate the opportunity costs for each good and each country. [calculate your math step by step / write the equations]

c) In which good would the United States specialize, and what range of terms of trade would be acceptable?

d) Draw a PPC for each country, placing pounds of peanuts on the y-axis and pecans on the x-axis.

e) Choose any acceptable terms of trade to plot and label two points on the PPC. Explain how both countries are able to consume beyond their individual PPCs.

Assume that the United States and India enjoy constant opportunity costs and the production possibi

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