Suppose That a Worker in Agland Can Produce Either 10

question 87

Multiple Choice

Suppose that a worker in Agland can produce either 10 units of organic grain or 2 units of incense per year, and a worker in Zenland can produce either 5 units of organic grain or 15 units of incense per year. There are 20 workers in Agland and 10 workers in Zenland. Currently the two countries do not trade. Agland produces and consumes 100 units of grain and 20 units of incense per year. Zenland produces and consumes 50 units of grain and no incense per year. The combined output of the two countries is therefore 150 units of grain and 20 units of incense per year. If the two countries decided to trade, and completely specialized in producing the good for which each has a comparative advantage, what would the combined yearly output of the two countries be?

• A)50 units of grain and 40 units of incense.
• B)200 units of grain and 150 units of incense.
• C)150 units of grain and 20 units of incense.
• D)200 units of grain and 300 units of incense.

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