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The Following Data Outline Production Choices (A or B) in Two

Question 4

Multiple Choice

The following data outline production choices (A or B) in two nations, Landia and Scandia. Landia has a workforce of 12 and Scandia has a workforce of 10.

 Output per worker in Landia  Output per worker in Scandia ABAB Fish 80 Fish 160 Chips 040 Chips 048\begin{array} { | l | c | c | c | c | c | c | } \hline { \text { Output per worker in Landia } } & & && { \text { Output per worker in Scandia } } \\\hline & \mathrm { A } & \mathrm { B } & & & \mathrm { A } & \mathrm { B } \\\hline \text { Fish } & 8 & 0 & & \text { Fish } & 16 & 0 \\\hline \text { Chips } & 0 & 40 & & \text { Chips } & 0 & 48 \\\hline\end{array}

-Assume that before specialization and trade,each nation devoted half of its workforce to each product.If these two nations now fully specialize in accordance with comparative advantage,the total gains from specialization would be:


A) 8 chips
B) 50 chips and 24 fish
C) 32 fish
D) 8 chips and 32 fish
E) 24 chips and 32 fish

Correct Answer:

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