1. 3. 4. 10 10 Cliff Figure 3-2 Refer to Figure 3-2. Assume that Cliff and Paul
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10 10 Cliff Figure 3-2 Refer to Figure 3-2. Assume that Cliff and Paul were both producing wheat and corn, and both were dividing their time equally between the two. Then they decide to specialize in the product for which they have a comparative advantage and trade 3 bushels of wheat for 3 bushels of corn. What would Cliff now be able to consume? O A. 3 bushels of wheat and 5 bushels of corn B.5 bushels of wheat and 3 bushels of com c. 3 bushels of wheat and 3 bushels of com D. 4 bushels of wheat and 3 bushels of cornExplanation / Answer
1) option B (Cliff would specialize in wheat and produce 8 bushels as he has a lower opportunity cost in wheat production, then he would exchange 3 bushels of wheat for 3 bushels of corn)
2) option B (supply would exceed demand, added incentive would have to be given to increase demand)
3) option D - zero (consumption of toothbrushes remains the same)
4) Graph D (supply would shift to the left, it would be negatively impacted)
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