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

1. Visualizing the factor-endowment theory Consider the two hypothetical nations of Grork and Ferville. Suppose they both produce only two goods, electric dog collars and plastic army men. Each country faces a trade-off when producing the two goods. The following graph displays the respective production possibilities frontiers (PPF) for Grork and Ferville. If the two nations operate in autarky, which of the black points (plus symbol) are attainable for Grork? 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 plastic army man (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 $\mathrm{X}$ Point $Y$ Point Z Suppose Fe Grork engage in trade, and both nations desire the same post-trade consumption bundle. (Note: Assume both countries will not waste any 1 Ferville will electric dog collars.