Figure 3-15
Perry's Production Possibilities Frontier
Jordan's Production Possibilities Frontier
-Refer to Figure 3-15.Jordan should specialize in the production of
A)novels.
B)poems.
C)both goods.
D)neither good.

Question

Figure 3-15
Perry's Production Possibilities Frontier
Jordan's Production Possibilities Frontier  
-Refer to Figure 3-15.Jordan should specialize in the production of
A)novels. 
B)poems. 
C)both goods. 
D)neither good.

Quizplus · Accepted Answer

Jordan's production possibilities frontier shows that they have a comparative advantage in producing novels compared to Perry. This is because Jordan's opportunity cost of producing novels is lower than Perry's (meaning they have to give up fewer units of poems to produce an additional unit of novels). Therefore, Jordan should specialize in producing novels and trade with Perry for poems, resulting in higher overall output for both countries.

Figure 3-15 Perry's Production Possibilities Frontier