The world consists of two countries, M and N. The graphs show their production possibilities for wheat and rice.
Countries M and N operate on their production possibility curves and, before specialisation, country M produces 60 units of wheat and country N produces 30 units of wheat.
What will be the change in the world output of rice if both countries decide to specialise according to comparative advantage?
1 )
It will fall by 5 units.
2 )
It will fall by 30 units.
It will rise by 5 units.
4 )
It will rise by 30 units.
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