Suppose That a Worker in Cornland Can Grow Either 40

question 48

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 true?

• A)Both countries could gain from trade with each other.
• B)Neither country could gain from trade with each other because Cornland has an absolute advantage in both goods.
• C)Neither country could gain from trade with each other because neither one has a comparative advantage.
• D)Oatland could gain from trade between the two countries,but Cornland definitively would lose.

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A person or organization that purchases goods or services from another business or individual, entering into a commercial transaction.

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