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.All of the following are terms of trade that could possibly benefit both countries except
A)1 hat : 2 clocks
B)1 hat : 4 clocks
C)1 hat : 5 clocks
D)1 hat : 8 clocks

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.All of the following are terms of trade that could possibly benefit both countries except
A)1 hat : 2 clocks 
B)1 hat : 4 clocks 
C)1 hat : 5 clocks 
D)1 hat : 8 clocks

Quizplus · Accepted Answer

A trade ratio of 1 hat : 8 clocks is likely too extreme and may not benefit both countries, as it could be outside the range of mutually beneficial terms of trade based on their opportunity costs.

Table 9-6 Output Per Hour Production and Production