The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or another product.The last two columns give each country's consumption without trade. $$\begin{array} { l c c c c c c }
& \begin{array} { c }
\text { Maxirnumn } \
\text { beer } \
\text { production }
\end{array} & \begin{array} { c }
\text { Maxirnum } \
\text { whiskey } \
\text { production }
\end{array} & \begin{array} { c }
\text { Beer consumption } \
\text { without trade }
\end{array} & \begin{array} { c }
\text { Beer consurnption } \
\text { without trade }
\end{array} \
\begin{array} { l }
\text { Northem } \
\text { Irelard } \
\text { Southem }
\end{array} & 500 \mathrm { kegs } & 1500 \mathrm { kegs } & 300 \mathrm { kegs } & 600 \text { bottles } \
\text { Ireland } & 1200 \mathrm { kegs } & \mathbf { 8 0 0 } \mathrm { kegs } & 600 \mathrm { kegs } & 400 \text { bottles }
\end{array}$$ Suppose that trade occurs.Each country completely specializes and 500 kegs of beer are traded for 500 bottles of whiskey.What is the international price of beer?
A)1 bottle of whiskey = 1 keg of beer
B)3 bottles of whiskey = 1 keg of beer
C)2/3 bottle of whiskey = 1 keg of beer
D)1 bottle of whiskey = 3 kegs of beer

Question

The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or another product.The last two columns give each country's consumption without trade. $$\begin{array} { l c c c c c c } 
& \begin{array} { c } 
\text { Maxirnumn } \
\text { beer } \
\text { production }
\end{array} & \begin{array} { c } 
\text { Maxirnum } \
\text { whiskey } \
\text { production }
\end{array} & \begin{array} { c } 
\text { Beer consumption } \
\text { without trade }
\end{array} & \begin{array} { c } 
\text { Beer consurnption } \
\text { without trade }
\end{array} \
\begin{array} { l } 
\text { Northem } \
\text { Irelard } \
\text { Southem }
\end{array} & 500 \mathrm { kegs } & 1500 \mathrm { kegs } & 300  \mathrm { kegs } & 600  \text { bottles } \
\text { Ireland } & 1200 \mathrm { kegs } & \mathbf { 8 0 0 } \mathrm { kegs } & 600 \mathrm { kegs } & 400  \text { bottles }
\end{array}$$ Suppose that trade occurs.Each country completely specializes and 500 kegs of beer are traded for 500 bottles of whiskey.What is the international price of beer?
A)1 bottle of whiskey = 1 keg of beer
B)3 bottles of whiskey = 1 keg of beer
C)2/3 bottle of whiskey = 1 keg of beer
D)1 bottle of whiskey = 3 kegs of beer

Quizplus · Accepted Answer

The international price of beer is established as 1 bottle of whiskey for 1 keg of beer, based on the trade agreement where 500 kegs of beer are traded for 500 bottles of whiskey.

The First Two Columns Give the Maximum Daily Amounts of Beer