(Solved): 1. Visualizing the factor-endowment theory Consider the two hypothetical nations of Greenburg and F ...

1. Visualizing the factor-endowment theory Consider the two hypothetical nations of Greenburg and Fireton. Suppose they both produce only two goods, electric dog collars and pogo sticks country faces a trade-off when producing the two goods. The following graph displays the respective production possibilities frontiers (PPF) for Greenburg and Fireton. If the two nations operate in autarky, which of the black points (plus symbol) are attainable for Fireton? Check all that apply. Point A Point $B$ Point C Point D Suppose the two nations decide to trade with each other at a rate of one electric dog collar per pogo stick ( $1:1$ ). On the previous graph, use the green line (triangle symbol) to represent the terms of trade to help you find your answer to the following question. You will not be graded on where you place the line on the graph. Which of the grey points (star symbol) that were not attainable by either country in autarky are attainable once the countries agree to trade, holding all else constant? Check all that apply. Point W Point $X$ Point $Y$ Point Z Suppose Fireton and Greenburg engage in trade, and both nations desire the same post-trade consumption bundle. (Note: Assume both countries will not waste any resources.) Greenburg will pogo sticks.