The country of puglia produces and consumes two products, Ask an Expert

Finance

The country of Puglia produces and consumes two products, pasta ( P ) and togas ( T ), with increasing marginal opportunity costs of producing more of either product. With no international trade the relative price of pasta is 4 T / P .

a. Show Puglia's economy, using a graph with a production-possibility curve and community indifference curves.

b. Puglia now opens to international trade. With free trade the world relative price of pasta is 3 T / P . Which product will Puglia export? Which product will it import?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91966925

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