posted by rimm on .
Mexico produce only two goods, fish and coconuts. They only consume goods
produced within their own country and do not trade with anyone. However Mexico needs more fish now.if they produce more fish they have to give up more coconuts. In the neighbor country, Canada has lower relative price in fish.Mexico and Canadian president sign agreement for trade.
will Mexico as a whole be able to purchase more fish and more coconuts after the agreement enacted?
4.does the answer to previous question, require the mexican economy to produce at an efficient point along its PPF? How mexico could reach that efficient point?
If not, then explain why your answer to the previous question does not require the Mexican economy to produce at an efficient point along its PPF.