Assume that Blade Runner specializes in producing in-line skates and Hang Ten specializes in producing surfboards. After trade Blade Runner exports 800 pairs of in-line skates and imports 200 surfboards. The terms of trade
A) are 1:4 in-line skates to surfboards.
B) are 4:1 in-line skates to surfboards.
C) are 1/4:1 in-line skates to surfboards.
D) cannot be determined from this information.

Question

Quizplus · Accepted Answer

The terms of trade are determined by the ratio of goods exchanged. Blade Runner exports 800 pairs of in-line skates and imports 200 surfboards, which simplifies to a 4:1 ratio of in-line skates to surfboards.

Assume That Blade Runner Specializes in Producing In-Line Skates and Hang