Suppose That a Worker in Cornland Can Grow Either 40

question 99

Multiple Choice

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year,and a worker in Oatland can grow either 5 bushels of corn or 50 bushels of oats per year.There are 20 workers in Cornland and 20 workers in Oatland.If the two countries do not trade,Cornland will produce and consume 400 bushels of corn and 100 bushels of oats,while Oatland will produce and consume 60 bushels of corn and 400 bushels of oats.If each country made the decision to specialize in producing the good in which it has a comparative advantage,then the combined yearly output of the two countries would increase by

• A)280 bushels of corn and 450 bushels of oats.
• B)340 bushels of corn and 500 bushels of oats.
• C)360 bushels of corn and 520 bushels of oats.
• D)360 bushels of corn and 640 bushels of oats.

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Definitions:

CCA Class

Denotes the category of depreciable property a business asset falls into in Canada, determining the rate of depreciation for tax purposes.

Net Advantage to Leasing

The total financial benefit of leasing an asset, comparing the costs of leasing versus buying.

Resale Value

The estimated market value at which an asset can be sold in the future.