International Trade Theory and Policy
by Steven M. Suranovic
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Trade 40-5A
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AnswerTo verify that a point is on the PPF we can simply plug the quantities into
the PPF equation to see if it is satisfied. The PPF formula is
International Trade Theory and Policy - Chapter 40-5A: Last Updated on 8/20/03
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.
If we plug in the exogenous variables for the US into the formula we get
. Plugging
in the production point above yields, 
and since 16 + 8 equals 24 the production point must lie on the
PPF.
