Suppose That a Worker in Cornland Can Grow Either 40

question 35

Multiple Choice

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. Which of the following statements is correct?

• A)Both countries could gain from trade with each other.
• B)Neither country would gain from trade because Cornland has an absolute advantage in both goods.
• C)Neither country would gain from trade because neither one has a comparative advantage.
• D)Only Oatland could possibly gain from trade.

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