Thursday, Sept 27th, 2012:
1. Canada wheat and cars problem:
a. Draw table.
b. 1/15 of a car
c. PPF w/ straight line. 20 million cars, 300 million bushels of wheat
d. 150 million bushels of wheat, halfway point on the frontier/line
e. 200 bushels of wheat, outside the frontier
2. England and Scotland scones and sweaters problem:
a. England: scones, Scotland: sweaters
b. Draw table.
c. Scones: England
d. Sweaters: Scotland
e. Scotland trades sweaters because it has a comparative advantage in sweater production.
f. Yes, because Scotland still has a comparative advantage in sweaters, and England would still produce scones. Both would still end up consuming outside of their frontier.
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