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Question ID#: 89110

The table below outlines the possible tradeoffs of producing units of cloth and corn for both Country A and Country B.

Country A cloth / corn
   	
1: 	0 // 4
2:	6 // 3
3: 	14 // 0
	
    Country B cloth / corn
   
1: 	0 // 8
2:	8 // 6
3: 	18 // 0

Which scenario best describes the effects of trade between the countries?

A)	Both countries would gain if Country A traded corn for Country B’s cloth.
B)	Both countries would gain if Country A traded cloth for Country B’s corn.
C)	Country B would not gain from trade, because it has an absolute advantage in the production of both goods.

The given answer is (B), which would usually be the no-brainer. But, in case both countries select the second given production scenario, there will actually be a production that exceeds the production in the trade scenario. So I took answer (C).  What do you guys think on that?

Sophie Macon · Answer

Question ID#: 89110

But, in case both countries select the second given production scenario, there will actually be a production that exceeds the production in the trade scenario. So I took answer (C).

@Chevalier - what do you mean by the sentence above?

Chevalier · Answer

oh wow... now I see it... sorry for bothering...