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 swords will Morocco gain compared to the "without trade" numbers?
A)5
B)45
C)105
D)150

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 swords will Morocco gain compared to the "without trade" numbers?
A)5 
B)45 
C)105 
D)150

Quizplus · Accepted Answer

Morocco will gain 45 swords compared to the "without trade" numbers. This is because Morocco can produce 70 belts with the same resources that it takes to produce 35 swords. However, by trading 70 belts for 105 swords, Morocco can acquire more swords than it could have produced on its own.

Table 7-6 Production and