Consider a World of Two Countries Producing Only Wheat and Cloth

question 5

Multiple Choice

Consider a world of two countries producing only wheat and cloth. In one hour, residents of Country A can produce 1 unit of wheat and 0.5 unit of cloth, whereas residents of Country B can produce 0.3 unit of wheat and 0.4 unit of cloth. Country A should export

• A) wheat and cloth; country B should not export anything.
• B) wheat and country B should export cloth.
• C) nothing and country B should export both wheat and cloth.
• D) cloth and country B should export wheat.

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Definitions:

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