A-LevelEconomicsInternational economic issues9708/12 · Oct/Nov 2010 · Q221 Mark
The table shows how much rice and wheat two countries, X and Y, can grow when divides its resources equally between growing rice and wheat. country X country Y rice (units) 900 m 100 m wheat (units) 300 m 50 m Assume that each country now specialises according to comparative advantage and trades with the other country. Which terms of trade would benefit both countries?
A1 wheat = 5 rice
B1 wheat = 3 rice
C1 wheat = 2.5 rice
D1 wheat = 2 rice
✓ Correct answer
C: 1 wheat = 2.5 rice
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