[CFA L2]Economics 【Reading 16】Sample
This table below outlines the possible tradeoffs of producing milk and bread for Country A and Country B. Country A | Country B | Milk | Bread | Milk | Bread | 0 | 5 | 0 | 8 | 10 | 0 | 12 | 0 |
A)
| Neither country would gain from trade. |
| B)
| Both countries would gain if Country A traded bread for B's milk. |
| C)
| Both countries would gain if Country A traded milk for B's bread. |
|
Country A gives up 1 bread to produce 2 milk. Country B gives up 1 bread to produce 1.5 milk. Country A should make milk and Country B should make bread. |