Refer to Figure 3. Originally, Ben was producing at his point A and Jerry was producing at his point A. Then, each person decided to specialize in the product in which he has a comparative advantage. Furthermore, they agreed to trade 4 pounds of cones for 2 pounds of ice cream. As a result of these new arrangements, the gains from trade relative to the original situation are as follows:
a. 1 additional pound of cones for Ben and 1 additional pound of ice cream for Jerry.
b. 1 additional pound of ice cream for Ben and 1 additional pound of cones for Jerry.
c. 2 additional pounds of ice cream for Ben and 2 additional pounds of cones for Jerry.
d. 2 additional pounds of ice cream for Ben and 1 additional pound of cones for Jerry.
Answer: b. 1 additional pound of ice cream for Ben and 1 additional pound of cones for Jerry.
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A. Population growth, there has been a substantial increase in the standard of living in industrialized nations B. Population growth, there has been a substantial decrease in the productivity in industrialized nations C. Declines in economic efficiency, there has been a rise in the standard of living in industrialized nations D. Declines in economic efficiency, there has been a rise in population growth in industrialized nations
A market in which the money of one nation is exchanged for the money of another nation is a ________.
A. foreign exchange market B. resource market C. stock market D. bond market