Table 9-12
Output per hour Production and Production
of work Consumption without Trade with Trade
Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 9-12 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-12. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many belts will Morocco gain compared to the "without trade" numbers?
A) 0
B) 10
C) 50
D) 60

Question

Table 9-12
Output per hour Production and Production
of work Consumption without Trade with Trade
  Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 9-12 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-12. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many belts will Morocco gain compared to the "without trade" numbers?
A) 0 
B) 10 
C) 50 
D) 60

Quizplus · Accepted Answer

Morocco gains 10 belts compared to the "without trade" numbers because the terms of trade allow them to trade 50 belts for 75 swords, which is more beneficial than their domestic production possibilities.

Table 9-12 Output Per Hour Production and Production