The following table shows the units of calculators and rice produced by a laborer in a day in Japan and Korea. Table 20.3
- Refer to Table 20.3.Determine the limits on the terms of trade for 1 pound of rice.

Question

The following table shows the units of calculators and rice produced by a laborer in a day in Japan and Korea. Table 20.3 
- Refer to Table 20.3.Determine the limits on the terms of trade for 1 pound of rice.

Quizplus · Accepted Answer

The terms of trade are determined by the opportunity costs of producing goods in each country. If the opportunity cost of producing 1 pound of rice is between two-fifths of a calculator and 1 calculator, then these are the limits for the terms of trade.

The Following Table Shows the Units of Calculators and Rice