Suppose That the Cost of Producing 1 Unit of Wine

question 99

Multiple Choice

Suppose that the cost of producing 1 unit of wine in Happy Island is 2 units of rice;in Joy Island 1 wine costs 4 rice.What might be possible terms of trade between the two countries?

• A)1 rice = 3/8 wine.
• B)1 rice = 3 wine.
• C)1 rice = 6 wine.
• D)1 wine = 1 rice.

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