Answer to Question #193116 in Microeconomics for Simranjit kaur

Question

The only two countries in the world alpha and omega production possibilities if these countries choose not to trade but would be the total production of each country country decides to specialise in the good in which it has a comparative advantage by specialising what is the total world production of each product now

Answer 1

If these countries choose not to trade, then the total world's production of wheat is 4500 units, and rice will be 3500 units.

Omega has the comparative advantage in the production of wheat and Alpha has the comparative advantage in the production of rice. Now, if both the countries decide to specialize in the goods in which each has a comparative advantage, then the total world production of wheat is 300 units and rice is 2500 units