Consumption Possibility Frontier

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Consumption Possibility Frontier

• The consumption possibility frontier states
  the maximum amount of consumption of a good a
  country can obtain for any given amount of the
  other commodity

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• In the absence of trade, the consumption
  possibility frontier is the same as the
  production possibility curve
• Trade enlarges the consumption possibility of the
  two countries

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The consumption possibility frontier states the
maximum amount of consumption of a good a country
can obtain for any given amount of the other
commodity

• Is Figure 13.3 correct?

Beer
Consumption Possibilities Frontier
Sausage
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Trade Expands Consumption Possibilities

• Are these diagrams correct?

(a) Italy
(b) Germany
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CPF before trade AC and ACCPF after trade
AB and BCABAC and AC BC
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