Question

True or false: without engaging in international trade, freedonia and sylvania would not have been able to consume at the after-trade consumption bundles. (hint: base this question on the answers you previously entered on this page.)

Answer 1

The correct answer is false.

It is false that without engaging in international trade, Freedonia and Sylvania would not have been able to consume at the after-trade consumption bundles.

Freedonia and Sylvania had to engage in international trade, the production possibilities frontier or PPF shows that production is impractical. Both countries are able to consume the goods they produce.

Freedonia and Sylvania were small countries that were formed due to the consequences of the War in the Balkans in 1912. Private businessmen acquired land knowing that the Ottoman Empire had been defeated and the Austria Empire was in ruins. Those small countries became part of what today is Romania, Albania, and Bulgaria,

Answer 2

The correct answer is True.

Without engaging in international trade, any quantity outside a country's original PPF is considered infeasible. In other words, given an individual country's resources, the bundles on the PPF are the greatest quantities of the goods that a country can produce (and, therefore, consume) without trade. By exploiting each country's comparative advantage to realize gains from trade, Maldonia and Lamponia can actually consume outside their individual PPFs through specialization.