Table 7-6
Production and
Consumption Production
Without Trade With Trade
Estonia and Morocco can produce both swords and belts.Table 7-6 shows the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,how many belts will Morocco gain compared to the "without trade" numbers?

Question

Table 7-6
Production and
Consumption Production
Without Trade With Trade
  Estonia and Morocco can produce both swords and belts.Table 7-6 shows the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,how many belts will Morocco gain compared to the "without trade" numbers?

Quizplus · Accepted Answer

Morocco gains 10 belts compared to the "without trade" numbers because the terms of trade allow them to trade 70 belts for 105 swords (70 x 1.5), and if they were producing swords themselves, they would have fewer belts available.

Table 7-6 Production and