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 clocks 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 clocks will Denmark gain compared to the 'without trade' numbers?

Quizplus · Accepted Answer

Denmark will gain 100 clocks compared to the 'without trade' numbers. Denmark will produce 1200 clocks with trade, and it will consume 900 clocks. So, Denmark will have 300 clocks left over. If 150 hats are traded for 1.8 clocks each, then Denmark will gain 150 * 1.8 = 270 clocks. So, Denmark will gain a total of 300 + 270 = 100 clocks 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