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Questions:•ThemaximumamountofsteeloraluminumthatCanadaandFrancecanproduceiftheyfullyuseallthefactorsofproductionattheirdisposalwiththebesttechnologyavailabletothemisshown:•Assumethatproductionoccursunderconstantcostconditions.Ongraphpaper,drawtheproductionpossibilitiesschedulesforCanadaandFrance;locatealuminumonthehorizontalaxisandsteelontheverticalaxisofeachcountry’sgraph.Intheabsenceoftrade,assumethatCanadaproducesandconsumes600tonsofaluminumand300tonsofsteelandthatFranceproducesandconsumes400tonsofaluminumand600tonsofsteel.Denotetheseautarkypointsoneachnation’sproductionpossibilitiesschedule.•a.DeterminetheMRTofsteelintoaluminumforeachnation.Accordingtotheprincipleofcomparativeadvantage,shouldthetwonationsspecialize?Ifso,whichproductshouldeachcountryproduce?Willtheextentofspecializationbecompleteorpartial?Denoteeachnation’sspecializationpointonitsproductionpossibilitiesschedule.Comparedtotheoutputofsteelandaluminumthatoccursintheabsenceoftrade,doesspecializationyieldincreasesinoutput?Ifso,byhowmuch?•b.Withinwhatlimitswillthetermsoftradelieifspecializationandtradeoccur?SupposeCanadaandFranceagreetoaterms-of-traderatioof1:1(1tonofsteel=1tonofaluminum).Drawtheterms-of-tradelineinthediagramofeachnation.Assumingthat500tonsofsteelaretradedfor500tonsofaluminum,areCanadianconsumersbetteroffastheresultoftrade?Ifso,byhowmuch?HowaboutFrenchconsumers?•c.DescribethetradetrianglesforCanadaandFrance.