Table 3-2 Assume That Aruba and Iceland Can Switch Between Producing Coolers

question 219

Multiple Choice

Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.

-Refer to Table 3-2.At which of the following prices would both Aruba and Iceland gain from trade with each other?

• A) 2 radios for 4 coolers
• B) 2 radio for 6 coolers
• C) 2 radio for 10 coolers
• D) Aruba and Iceland could not both gain from trade with each other at any price.

---

Definitions:

Developing Countries

Nations with a lower living standard, underdeveloped industrial base, and a lower Human Development Index (HDI) compared to developed countries.

Political Instability

A situation where a government, due to various factors such as conflict, corruption, or ineffective governance, faces challenges in maintaining control or authority.

Frictional Unemployment

A form of unemployment that occurs when people are in between jobs or are entering the workforce for the first time, often due to voluntary decisions.

Brain Drain

The emigration of highly skilled or educated individuals from a particular country or region to another, often for better opportunities.