Below Is the Productivity Per Worker (Kilos Per Day)in the Wheat

question 126

Multiple Choice

Below is the productivity per worker (kilos per day) in the wheat and bean industries of Caledonia and Ibrox.The working population in each country is 16 million people.

-Refer to the data above to answer this question.Suppose that initially each country was self-sufficient in the two products and employed half of their working populations in each industry.If subsequently each country were to totally specialize in the product in which it has a comparative advantage,what would be the subsequent gains from trade?

• A)16 wheat and 16 beans.
• B)16 wheat and 32 beans.
• C)0 wheat and 64 beans.
• D)48 wheat and 32 beans.

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Definitions:

Economic Revival

A period of growing business activity signaling the end of a recession or economic downturn, often characterized by increases in employment, consumer spending, and investment.

Trade Deficit

A condition in which a nation's imports of goods and services surpass its exports, resulting in a deficit in the trade balance.

Absolute Advantage

A situation where a country, entity, or individual can produce a good or service more efficiently (using fewer resources) than another.

Comparative Advantage

The ability of a country or individual to produce a good or service at a lower opportunity cost than another entity, leading to more efficient trade.