Suppose two countries e and f use many inputs country e


Suppose two countries E and F use many inputs. Country E exports tractors and imports televisions. Assuming there are no economies of scale, which of the following statements is true?

a) If the countries did not trade, then E would have a lower opportunity cost for tractors.

b) Even though there is trade, E has a lower opportunity cost for tractors.

c) E is sure to produce no televisions while F is sure to produce no tractors.

d) Neither country can consume at a point outside its production possibility frontier.

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Macroeconomics: Suppose two countries e and f use many inputs country e
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