(Solved): \( = \) 7 4. Specialization and trade When a country has a comparative advantage in the productio ...

\( = \) 7 4. Specialization and trade When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibisties frontiers (PPFs) for Candonia and Desonia. Both countries produce grain and tea, each initially (l.e, before specialization and trade) producing 12 miltion pounds of grain and 6 milion pounds of tea, as indicated by the grey stars marked with the letter \( \mathrm{A} \). The following draph shows the same phe for Desonia as before, as nell as its hitial consurtction at poire A. As you did for Candonis, pisce a black point folus symbeli an the folowing graph to indicace Desonias cortsimpoion atter trade. Thue Faile