Refer to the Above Diagrams

question 90

Multiple Choice

Refer to the above diagrams.Assume that prior to specialization and trade Italy and Greece preferred points I and G on their production possibilities curves.As a result of complete specialization according to comparative advantage,the resulting gains in output will be:

• A) 5X and 15Y.
• B) 10Y.
• C) 15X and 5Y.
• D) 25X. Italy should solely make product X (50 units)and Greece should solely make product Y (60 units).Initially,Italy made 25 units of both product X and product Y and Greece made 20 units of both product X and product Y,giving a combined output of 45 units of product X and 45 units of product Y.After specialization,there will be 50 units total of product X and 60 units total of product Y.This is a gain of 5 units of product X and 15 units of product Y.

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The strategies and policies employed by President Herbert Hoover aimed at combating the Great Depression, often criticized for being ineffective.

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