Consider the No-Trade Input/output Situation Presented in the Following Table

question 57

Multiple Choice

Consider the no-trade input/output situation presented in the following table and graph for countries A and B.Assuming that free trade is legal; develop a scenario that will benefit the citizens of both countries.
Input/Output without Trade

• A)Country B should make all the textiles and trade with Country A for food.
• B)Country A should make nothing but textiles and trade with Country B for food.
• C)Country B should make all the textiles and Country A should make all the food.
• D)Country B should make nothing but textiles and trade with Country A for food.

		country
	A	B	totoal
I. total potintal output
(lbs. or yard; 000,000s)
food	600	500	1,100
textiles	1,200	500	1,700
II. consumption
(lbs. or yard; 000,000s)
food	300	400	700
textiles	200	400	600

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