Table 18-6
Production and
Consumption Production
Without Trade With Trade
Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.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 18-6
Production and
Consumption Production
Without Trade With Trade
  Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.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 determine how many clocks Belize gains, we need to compare the number of clocks they receive through trade to the number they would have without trade. If Belize trades 150 hats at a rate of 1 hat for 1.8 clocks, they receive 150 * 1.8 = 270 clocks. Without trade, they would have 150 clocks (assuming they produce 1 clock per hat). Therefore, the gain is 270 - 150 = 120 clocks.

Table 18-6 Production and