Refer to the information provided in Table 18.1 below to answer the questions that follow.
Table 18.1
-Refer to Table 18.1. Before specialization, Mexico produces 120 bushels of oranges and 80 bushels of bananas, and Guatemala produces 40 bushels of oranges and 20 bushels of bananas. After specialization, the increase in orange production is
A) 10 bushels of oranges.
B) 20 bushels of oranges.
C) 25 bushels of oranges.
D) 40 bushels of oranges.

Question

Refer to the information provided in Table 18.1 below to answer the questions that follow.
Table 18.1 
-Refer to Table 18.1. Before specialization, Mexico produces 120 bushels of oranges and 80 bushels of bananas, and Guatemala produces 40 bushels of oranges and 20 bushels of bananas. After specialization, the increase in orange production is
A) 10 bushels of oranges. 
B) 20 bushels of oranges. 
C) 25 bushels of oranges. 
D) 40 bushels of oranges.

Quizplus · Accepted Answer

After specialization, both countries focus on producing the good for which they have a comparative advantage. If Mexico specializes in oranges and Guatemala in bananas, Mexico can increase its orange production significantly, leading to a total increase of 40 bushels of oranges.

Refer to the Information Provided in Table 18