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Advanced Placement (AP), 19.01.2021 16:50 biancaadenisee2
Assume that the United States and India enjoy constant opportunity costs and the production
possibilities shown in the table.
Peanuts
Pecans
(millions of pounds) (millions of pounds)
India
10
1
United States
5
10
a) Which country has an absolute advantage in pounds of peanuts?
b) Use the table to calculate the opportunity costs for each good and each country.
c) In which good would the United States specialize, and what range of terms of trade would be
accentable
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Answers: 3
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Assume that the United States and India enjoy constant opportunity costs and the production
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