Note: Same information for questions 1-7, except where noted…
Note: Same information for questions 1-7, except where noted. For questions 1-7, use any information only after it is given. At a certain point you are told which good is capital-intensive, don’t use that information to answer any questions that come before. The two figures show the Production Possibilities Frontier for two countries, Home and Foreign. Also shown for each country is the indifference curve that is tangent to its PPF. There are two factors: capital and labor. There are two goods, Movies and Books. When the two countries open up to trade, which good will Home export?