Table 19.6
Production and
Consumption Production
Without Trade with Trade
$$\begin{array} { | l | l | l | l| l | }
\hline & \text { Clerks } & \text { Hats } & \text { Clerks } & \text { Hats } \
\hline \text { Denmark } & 900 & 150 & 1200 & 0 \
\hline \text { Belize } & 150 & 100 & 0 & 400 \
\hline
\end{array}$$ Denmark and Belize can produce both clocks and hats. Table 19.6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19.6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Denmark gain compared to the 'without trade' numbers?

Question

Table 19.6
Production and
Consumption Production
Without Trade with Trade
 $$\begin{array} { | l | l | l | l| l | } 
\hline & \text { Clerks } & \text { Hats } & \text { Clerks } & \text { Hats } \
\hline \text { Denmark } & 900 & 150 & 1200 & 0 \
\hline \text { Belize } & 150 & 100 & 0 & 400 \
\hline
\end{array}$$ Denmark and Belize can produce both clocks and hats. Table 19.6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19.6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Denmark gain compared to the 'without trade' numbers?

Quizplus · Accepted Answer

Denmark produces 1200 clocks with trade and trades 150 hats for 270 clocks (150 hats * 1.8 clocks/hat). Without trade, Denmark consumes 150 hats. With trade, Denmark gains 270 clocks but loses 150 hats, resulting in no net gain in hats compared to the 'without trade' numbers.

Table 196 Production and Consumption Production Without Trade with Trade

Table 196
Production and
Consumption Production
Without Trade with Trade