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Suppose there are 20,000 hours of labor available for production in Malaysia. Five hours of labor are always required to produce one bushel of soybeans, and four hours of labor are always required to produce a single T-shirt.
A. Placing soybeans on the horizontal axis and T-shirts on the vertical axis, draw Malaysia’s production possibilities line and explain its shape and dimensions. 2. If Malaysia engages in trade with another nation, and if the international terms of trade becomes
B. T- shirts for every bushel of soybeans, which good would Malaysia most likely wish to specialize in and export? Why?
C. Assuming complete specialization, please draw and explain Malaysia’s trade triangle if it trades at an international terms of trade of 2 T-shirts for every bushel of soybeans, and if Malaysia imports 2000 units of the good it does not produce after it specializes.
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