Two canadian workers, Dan and Nikki, can each produce stoves of apples. Dan can produce either 140 pounds of apples or 1 stove per month. Nikki can produce either 80 pounds of apples or 1 per month.
A) Plot Canada's production possibilities curve by plotting at least 3 points on the curve.
B) How much of each good is produced if each worker specialized according to comparative advantage
C) Assuming that the world prices are such that 1 stove = 70 pounds of apples on the international market
1- If canada is open to trade, show canada's consumption possibilities on the graph above by plotting at least 2 points on the curve.
2- What is the most of each good that canadians can consume when the economy is closed.
D) Assuming that the world prices are such that 1 stove = 180 pounds of apples on the international market
1- If canada is open to trade, show canada's consumption possibilities on the graph above by plotting at least 2 points on the curve.
2- what is the most of each good that canadians can consume when the economy is open.
3- how much more can canadians consume when the economy is open as opposed to when it closed.