Below Is Production Possibilities Data for the Countries of Mental

question 66

Multiple Choice

Below is production possibilities data for the countries of Mental and Etheric.

-Refer to the information above to answer this question.Suppose that the two countries,who were producing at combination D before trade,now specialize and engage in free trade and establish the terms of trade at 1 unit of rice cake = 1.5 units of soya milk.If Etheric exports 30 million units of rice cakes to Mental,what will be the gains from trade for each country?

• A)Mental gains 30 million units of rice cakes and Etheric gains 45 million units of soya milk.
• B)Mental gains 45 million units of rice cakes and Etheric gains 30 million units of soya milk.
• C)Mental gains 15 million units of soya milk and Etheric gains 45 million units of soya milk.
• D)Mental gains 15 million units of soya milk and Etheric gains 5 million units of soya milk.
• E)Mental gains 15 million units of soya milk and Etheric gains 5 million units of rice cakes.

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Definitions:

Early In Life

Describes events or characteristics that occur or are present from a very young age.

Spatial Relations

The ability to perceive the positions of objects in relation to oneself and to each other.

Language

A system of communication used by a particular country or community.

Mathematics

The abstract science of numbers, quantity, and space, either as abstract concepts (pure mathematics) or as applied to other disciplines such as physics and engineering (applied mathematics).