Figure 3-20
Canada's Production Possibilities Frontier
Mexico's Production Possibilities Frontier
-Refer to Figure 3-20.If Canada and Mexico switch from each country dividing its time equally between the production of Good X and Good Y to each country spending all of its time producing the good in which it has a comparative advantage,then total production of Good X will increase by
A)3 units.
B)6 units.
C)9 units.
D)12 units.

Question

Figure 3-20
Canada's Production Possibilities Frontier
Mexico's Production Possibilities Frontier  
-Refer to Figure 3-20.If Canada and Mexico switch from each country dividing its time equally between the production of Good X and Good Y to each country spending all of its time producing the good in which it has a comparative advantage,then total production of Good X will increase by
A)3 units. 
B)6 units. 
C)9 units. 
D)12 units.

Quizplus · Accepted Answer

By specializing in the good in which they have a comparative advantage, Canada can increase its production of Good Y by 6 units (moving from point A to point B on its PPF) while Mexico can increase its production of Good X by 6 units (moving from point C to point D on its PPF). Therefore, the total production of Good X will increase by 6 units.

Figure 3-20 Canada's Production Possibilities Frontier