Table 9-11
Output per hour Production and Production
of work Consumption without Trade with Trade
Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-11 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-11. 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?
A) -100
B) 100
C) 120
D) 250

Question

Table 9-11
Output per hour Production and Production
of work Consumption without Trade with Trade
  Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-11 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-11. 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?
A) -100 
B) 100 
C) 120 
D) 250

Quizplus · Accepted Answer

Belize gains 120 clocks because they trade 150 hats at a rate of 1.8 clocks per hat, resulting in 270 clocks. Without trade, they would have had 150 clocks, so the gain is 270 - 150 = 120 clocks.

Table 9-11 Output Per Hour Production and Production