Use the following to answer question:
-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Both the United States and Mexico will gain from trade if one tractor trades for _____ barrels of crude oil.

Question

Use the following to answer question: 
-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Both the United States and Mexico will gain from trade if one tractor trades for _____ barrels of crude oil.

Quizplus · Accepted Answer

Both countries will gain from trade if the terms of trade are between their opportunity costs. If one tractor trades for 1,000 barrels of crude oil, it is likely within the range that benefits both countries based on their production possibilities.

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