Suppose That a Worker in Freedonia Can Produce Either 12

question 113

Multiple Choice

Suppose that a worker in Freedonia can produce either 12 units of corn or 4 units of wheat per year, and a worker in Sylvania can produce either 4 units of corn or 12 units of wheat per year. Each nation has 10 workers. Without trade, Freedonia produces and consumes 60 units of corn and 20 units of wheat per year. Sylvania produces and consumes 20 units of corn and 60 units of wheat. Then suppose that trade is initiated between the two countries, and Freedonia sends 60 units of corn to Sylvania in exchange for 60 units of wheat. What maximum amounts will Freedonia now be able to consume?

• A) 0 units of corn and 60 units of wheat
• B) 0 units of corn and 120 units of wheat
• C) 60 units of corn and 60 units of wheat
• D) 120 units of corn and 120 units of wheat

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