The table below outlines the possible tradeoffs of producing units of cloth and corn for both Country A and Country B. Country A Country B Units of Cloth Units of Corn Units of Cloth Units of Corn 0 4 0 8 6 3 8 6 14 0 16 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) Neither country would gain from trade, even if transportation costs were zero. C) Both countries would gain if Country A traded cloth for Country B’s corn. D) Country B would not gain from trade, because it has an absolute advantage in the production of both goods.
c
c…but it really depends how much you like corn
It’s C, Country A can produce cothing for 8/20 units of corn. Country B can produce clothing for 14/24 units of corn. A produces it cheaper.