Answer:
country X will export 27 pounds of Bananas for 4.21 pounds of sugars
Explanation:
<u>For country X </u>
1 labor period = 15.4 pounds of bananas
1 labor period = 2.4 pounds of sugar
next calculate opportunity costs
opportunity cost of 1 pound of Banana = 2.4 / 15.4 = 0.1558
opportunity cost of 1 pound of sugar = 15.4 / 2.4 = 6.4167
<u>For country Y </u>
1 labor period = 8.7 pounds of bananas
1 labor period = 3.1 pounds of sugar
opportunity cost of 1 pound of banana = 3.1 / 8.7 = 0.3563
opportunity cost of 1 pound of sugar = 8.7 / 3.1 = 2.8064
<em>when the opportunity costs are compared </em>
<em>Country X has a lower opportunity cost for the production of banana while </em>
<em>Country Y has a lower opportunity cost for the production of sugar </em>
Hence country X will export Banana
I pound of Banana will be exported for 0.1558 sugars
i.e. 27 pounds of Bananas will exchanged for ( 27 * 0.1558 ) sugars
27 pounds of Bananas = 4.21 pounds of sugars
