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Q. Opportunity Cost and PPF Assume Australia and New Zealand each have 100 acres of land available for farming of wheat and cotton.
A. Graph PPF for each nation.
B. Which nation has comparative advantage in wheat production? In cotton production? Which nation has absolute advantage in wheat production? In cotton production?
C. Assume New Zealand and Australia are consuming and producing 480 bushels of wheat and 240 bales of cotton and 240 bushels of wheat and 480 bales of cotton respectively. Elucidate how both countries could be made better off by trading.
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