Suppose That a Worker in Freedonia Can Produce Either 6

question 199

Multiple Choice

Suppose that a worker in Freedonia can produce either 6 units of corn or 4 units of wheat per year, and a worker in Sylvania can produce either 4 units of corn or 6 units of wheat per year. Each nation has 10 workers. For many years the two countries traded, each completely specializing in producing the grain for which it has a comparative advantage. Now, however, war has broken out between them and all trade has stopped. Without trade, Freedonia produces and consumes 30 units of corn and 20 units of wheat per year. Sylvania produces and consumes 20 units of corn and 30 units of wheat. By how much has the combined yearly output of the two countries declined?

• A) 10 units of corn and 10 units of wheat
• B) 20 units of corn and 20 units of wheat
• C) 30 units of corn and 30 units of wheat
• D) 40 units of corn and 40 units of wheat

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