Table 19-12
Production and
Consumption Production
Without Trade With Trade
$$\begin{array} { | l | l | l | l | l | l | }
\hline & \text { Swards } & \text { Beltr } & & \text { Svards } & \text { Beltr } \
\hline \text { Estoria } & 100 & 50 && 200 & 0 \
\hline \text { Morocco } & 50 & 40 && 0 & 120 \
\hline
\end{array}$$
Estonia and Morocco can produce both swords and belts.Table 19-12 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-12.All of the following are terms of trade that could possibly benefit both countries except

Question

Table 19-12
Production and
Consumption Production
Without Trade With Trade
 $$\begin{array} { | l | l | l | l | l | l | } 
\hline & \text { Swards } & \text { Beltr } & & \text { Svards } & \text { Beltr } \
\hline \text { Estoria } & 100 & 50 && 200 & 0 \
\hline \text { Morocco } & 50 & 40 && 0 & 120 \
\hline
\end{array}$$ 
Estonia and Morocco can produce both swords and belts.Table 19-12 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-12.All of the following are terms of trade that could possibly benefit both countries except

Quizplus · Accepted Answer

The terms of trade that could benefit both countries are those that lie between the countries' opportunity costs of production. In other words, if Estonia gives up 1 belt, it can produce either 1 or 2 swords, while if Morocco gives up 1 belt, it can produce either 0.8 or 2.5 swords. Therefore, the only terms of trade that are mutually beneficial are those where Estonia gets more than 1 sword for each belt and Morocco gets less than 2.5 swords for each belt. The only option that does not meet these conditions is D, which would give Morocco more than its efficient production level of swords for every belt traded.

Table 19-12 Production and Consumption Production Without Trade with Trade

Table 19-12
Production and
Consumption Production
Without Trade with Trade