Refer to the tables below.Which of the following would be feasible terms for trade between Latalia and Trombonia? Production possibilities tables for two countries, Latalia and Trombonia: Latalia's production possibilities: Trombonia's production possibilities:

Question

Refer to the tables below.Which of the following would be feasible terms for trade between Latalia and Trombonia? Production possibilities tables for two countries, Latalia and Trombonia: Latalia's production possibilities:

Trombonia's production possibilities:

Quizplus · Accepted Answer

Both Latalia and Trombonia have a comparative advantage in producing beans over pork. Latalia can produce 8 tons of beans or 2 tons of pork, while Trombonia can produce 4 tons of beans or 1 ton of pork. Therefore, it would make sense for Trombonia to trade 1 ton of pork for 4 tons of beans from Latalia, since they can produce pork at a lower opportunity cost than beans. In return, Latalia can benefit by trading their excess beans for Trombonia's pork. Option D offers a fair trade of 4 tons of beans for 1 ton of pork.

Refer to the Tables Below