The Table Below Shows Units of Wheat and Cloth Produced

question 48

Multiple Choice

The table below shows units of wheat and cloth produced by each worker per day in both the countries. Table 20.1 Refer to Table 20.1.Assume that the U.S.has only two workers and the terms of trade are 2 bushels of wheat per rack of clothing.What would be the gains from trade for the U.S.if it is producing according to its comparative advantage?

• A)2 racks of clothing
• B)2.5 racks of clothing
• C)1.5 racks of clothing
• D)3 racks of clothing
• E)1 rack of clothing

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