Q. Assume that there are 10 million workers in Canada also that each of these workers can manufacture either 2 cars or 30 bushels of wheat a yr.

a) Illustrate what is the opportunity cost of producing a car in Canada? a bushel of wheat in Canada? Elucidate the relationship among the opportunity costs of the two goods.

b) Draw Canada's construction possibilities frontier. If Canada chooses to consume 10 million cars, how much wheat con it consume w/out trade? Where is this located on the construction possibilities frontier?

c) Show assumes that the United States (US) offers to buy 10 million cars from Canada in exchange for 20 bushels of wheat per car. If Canada continues to consume 10 million cars, how much wheat does this deal allow Canada to consume? Label it on diagram. Show Canada accepts this deal?