Country a Can Produce Either 1,000 Tons of Food or 800

question 24

Multiple Choice

Country A can produce either 1,000 tons of food or 800 tractors in a given month.Country B can produce either 1,500 tons of food or 1,000 tractors in the same time period.In this situation,it is clear that trade would occur if the terms of trade were

• A) 1 unit of food equals 1 tractor.
• B) 1 unit of food equals 0.7 tractor.
• C) 0.67 unit of food equals 0.8 tractor.
• D) 0.5 unit of food equals 0.5 tractor.
• E) 0.1 unit of food equals 10 tractors.

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