Suppose that in Slovakia one unit of labor can produce either 20 tons of wheat or 40 tons of soy and in Poland one unit of labor can produce either 40 tons of wheat or 20 tons of soy. If each country has two units of labor, which of the following consumption combinations can be attained only with trade?
A) Slovakia consumes 80 tons of soy.
B) Slovakia consumes 30 tons of both soy and wheat.
C) Poland consumes 80 tons of wheat.
D) Poland consumes 40 tons of wheat and 20 tons of soy.

Question

Quizplus · Accepted Answer

Without trade, Slovakia can produce a maximum of 40 tons of wheat or 80 tons of soy with its two units of labor. To consume 30 tons of both soy and wheat, Slovakia would need to trade, as it cannot produce both simultaneously with its available labor.

Suppose That in Slovakia One Unit of Labor Can Produce