Question

President Trump campaigned on the promise to "Make America Great Again". Part of this program to make America Great Again relies on bringing jobs back to the US from manufacturing that is now being done in foreign countries. His plan for doing so is in its early stage of development and is likely to include taxes/tariffs on foreign goods and manufacturers, as well as quotas (restrictions on the amount of goods that can be imported).

Use the Production Possibilities Frontier Curves model for Trade between 2 people (Rancher/Farmer) to illustrate your answers to the following questions:

3. Assume that the US wanted to increase its domestic production such that it could produce as many goods as had been available when trade was allowed. What would the US have to do to increase production of both goods?

Answer 1