-Refer to the above table. If opportunity costs are constant, the two countries will gain from trade at a rate of exchange of
A)0.1 computer for 1 bicycle.
B)5 computers for 1 bicycle.
C)1 computer for 1 bicycle.
D)8 bicycles for 1 computer.

Question

-Refer to the above table. If opportunity costs are constant, the two countries will gain from trade at a rate of exchange of
A)0.1 computer for 1 bicycle. 
B)5 computers for 1 bicycle. 
C)1 computer for 1 bicycle. 
D)8 bicycles for 1 computer.

Quizplus · Accepted Answer

If opportunity costs are constant, the countries will gain from trade when they exchange goods at a rate that is between their opportunity costs. A rate of 1 computer for 1 bicycle suggests a fair trade where both countries can benefit, assuming their opportunity costs align with this rate.

-Refer to the Above Table