Examlex

Solved

Suppose That a Worker in Freedonia Can Produce Either 6

question 184

Multiple Choice

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year. Each nation has 10 workers. For many years the two countries traded, each completely specializing in producing the grain for which it has a comparative advantage. Now, however, war has broken out between them and all trade has stopped. Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat. By how much has the combined yearly output of the two countries declined?


Definitions:

Educational Levels

The stages of formal learning, typically categorized by degrees or certificates achieved, that reflect a person's academic achievements.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, often driven by international trade and investment.

Business Operations

The day-to-day activities required for a company to keep functioning and generate revenue.

Scope

The extent or range of an activity, project, or subject; the breadth of its coverage.

Related Questions