Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade

Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Denmark gain compared to the "without trade" numbers?
A)30
B)100
C)150
D)900

Question

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
  
Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Denmark gain compared to the "without trade" numbers?
A)30 
B)100 
C)150 
D)900

Quizplus · Accepted Answer

Denmark gains 30 clocks because, without trade, they would have to produce the clocks themselves. By trading 150 hats for 1.8 clocks each, they receive 270 clocks. If they produced the hats themselves, they would have fewer resources to produce clocks, resulting in a gain of 30 clocks compared to their production without trade.

Table 9-6 Output Per Hour Production and Production