Answer :
Answer:
Explanation:
In the Canadian country, it is possible that the country is able to produce either 100 units of lumber or 1000 lightbulbs. Then, 100 lumber is equal to 1000 bulbs in the home, and hence, one lumber is equivalent to 10 bulbs. Therefore, the opportunity cost of lumber in the home is ten bulbs.
Thus, the country's production possibilities frontier PPF is a linear combination of 100 lumber and 1000 bulbs. The graphical diagram of the production possibilities frontier PPF can be seen in the image below.
Country C is capable of producing either 100 units of lumber or 1,000 lightbulbs. Therefore, in the residence, [tex]100\ lumber = 1000\ bulbs[/tex], and thus [tex]1 \ lumber = 10\ bulbs[/tex]. As a result, the economic cost of lumber within the residence is equal to 10 bulbs.
- This country's PPF, on the other hand, is a linear mixture of 100 trees and 1000 bulbs.
- In the global market, one log costs $20, and one light costs $1 therefore, in the global market, [tex]1 \ timber =20\ bulbs[/tex]. As a result, the price of lumber on the global market is high.
- The opportunity cost of lumber is lower in the home country. As a result, it'll be a lumber specialist.
- If it specialized entirely in timber, it would manufacture 100 pieces of lumber and trade them for up to 2000 bulbs.
As a result, the proper answer is "Canada would focus on lumber production for its competitive advantage", therefore, following the trade, the country's CPF (BC) is a linear combination of 100 lumber and 2000 lights.
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