Table 3-5 Assume That England and Spain Can Switch Between Producing Cheese

question 405

Multiple Choice

Table 3-5
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.

-Refer to Table 3-5.Without trade,England produced and consumed 32 units of cheese and 2 units of bread and Spain produced and consumed 6 units of cheese and 2 units of bread.Then,each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 7 units of cheese for 2.5 units of bread.As a result,England gained

• A) 0 units of cheese and 0.5 unit of bread and Spain gained 1 unit of cheese and 0.5 unit of bread.
• B) 1 unit of cheese and 0.5 unit of bread and Spain gained 1 unit of cheese and 0.5 unit of bread.
• C) 7 units of cheese and 2.5 units of bread and Spain gained 7 units of cheese and 2.5 units of bread.
• D) 33 units of cheese and 2.5 units of bread and Spain gained 7 units of cheese and 2.5 units of bread.

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