Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.

-Refer to Table 3-2.Assume that Aruba and Iceland each has 80 labor hours available.Originally,each country divided its time equally between the production of coolers and radios.Now,each country spends all its time producing the good in which it has a comparative advantage.As a result,the total output of coolers increased by
A)20.
B)40.
C)60.
D)80.

Question

Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.
 
-Refer to Table 3-2.Assume that Aruba and Iceland each has 80 labor hours available.Originally,each country divided its time equally between the production of coolers and radios.Now,each country spends all its time producing the good in which it has a comparative advantage.As a result,the total output of coolers increased by
A)20. 
B)40. 
C)60. 
D)80.

Quizplus · Accepted Answer

Aruba has a comparative advantage in producing coolers, and Iceland has a comparative advantage in producing radios. When each country specializes in producing the good in which it has a comparative advantage, the total output of coolers will increase by 20 units.

Table 3-2 Assume That Aruba and Iceland Can Switch Between Producing Coolers