The opportunity cost of a table is 5 chairs in Nation A and 4 chairs in Nation B.If the countries specialize and trade,an acceptable terms of trade for both countries would be 3 chairs per table.

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Quizplus · Accepted Answer

An acceptable terms of trade for both countries would be between their opportunity costs, meaning it should be between 4 and 5 chairs per table. 3 chairs per table would not be acceptable to Nation A as it is below their opportunity cost.

The Opportunity Cost of a Table Is 5 Chairs in Nation