lumber. Mark a point on their production possibilities where they can get at least 3,000 tons.

b. Assume that the Canadians specialize completely because they figured out they have a comparative

advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask

for in return for this lumber to be as well off as they were with no trade? How much should they ask

for if they want to gain from trading with Venezuela? Note: We can think of this “ask” as the relative
price or trade price of lumber.

c.

Is the Canadian “ask” you identified in (b) also beneficial for Venezuelans? Use the production

possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.

32. In Exercise 19.31, is there an “ask” where Venezuelans may say “no thank you” to trading with Canada?

33. From earlier chapters you will recall that technological change shifts the average cost curves. Draw a
{"file_type": ".pdf", "title": "Principles of Microeconomics 3e", "creationdate": "2022-12-07T14:15:44-06:00", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "upload_timestamp": "2026-02-07T15:37:44.339247", "total_pages": 597, "moddate": "2022-12-07T14:23:05-06:00", "batch_upload": true, "file_size_mb": 26.99, "producer": "Prince 14.2 (www.princexml.com)", "creator": "PDFMiner", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "uploaded_via": "batch_uploader", "file_name": "Microeconomics3e.pdf"}