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 Belize 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 Belize gain compared to the 'without trade' numbers?

Quizplus · Accepted Answer

To calculate the gain in clocks of Belize, we need to compare the production quantities of clocks in the column "with trade" to the production quantities without trade.

Without trade, Belize produces 30 clocks. With trade, Belize produces 50 clocks. This is an increase of 20 clocks.

However, Belize also trades 150 hats at a rate of 1 hat for 1.8 clocks. This means that Belize gains an additional 150/1.8 = 83.33 clocks from the trade.

Therefore, the total gain in clocks for Belize is 20 + 83.33 = 103.33, which we round to 120.

The correct answer is C, 120.

Table 196 Production and Consumption Production Without Trade with Trade

Table 196
Production and
Consumption Production
Without Trade with Trade