Answer:
(B) 300 televisions and 100 radios in Teeveeland and 300 radios and 100 televisions in Radioland
Explanation:
Radioland
Each worker can produce either 4 radios or 1 television
The country has a total of 100 workers
<em>By specializing in the goods it has a comparative advantage, Radioland will only produce radios.</em>
Therefore, the total number of radios it will produce per year
= 4 radios per worker * 100 workers
= 400 radios.
If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year, Radioland will end up with
= 400 radios - 100 radios (to Teeveeland) + 100 televisions (from Teeveeland)
= 300 radios + 100 televisions in Radioland.
Teeveeland
Each worker can produce either 2 radios or 4 televisions
The country has a total of 100 workers
<em>By specializing in the goods it has a comparative advantage, Teeveeland will only produce televisions.</em>
Therefore, the total number of televisions it will produce per year
= 4 televisions per worker * 100 workers
= 400 televisions.
If Teeveeland trades 100 televisions to Radioland in exchange for 100 radios each year, Teeveeland will end up with
= 400 televisions - 100 televisions (to Radioland) + 100 radios (from Radioland)
= 300 televisions + 100 radios in Teeveeland.
