Below Is Some Hypothetical Data for the Countries of Canada

question 49

Multiple Choice

Below is some hypothetical data for the countries of Canada and Mexico.(Assume that Canada has 10 million workers per month available and Mexico has 20 million. )
Canada's Production Possibilities
(Output in millions of bushels per month)
Mexico's Production Possibilities
(Output in millions of bushels per month)
Output Before Trade
(Output in millions of bushels per month)

-Refer to the information above to answer this question.If each country totally specializes according to its comparative advantage and the terms of trade are 1 bushel of beans for 1.25 bushels of rye,what will be the gains from trade?

• A)60 bushels of rye and 100 bushels of beans.
• B)25 bushels of rye and 10 bushels of beans.
• C)45 bushels of rye and 10 bushels of beans.
• D)There are no gains from trade.

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