Question

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year. Each nation has 10 workers. Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat. Suppose that trade is then initiated between the two countries, and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat. Freedonia will now be able to consume a maximum of
Question 39 options:
a. 30 units of corn and 30 units of wheat.
b. 40 units of corn and 30 units of wheat.
c. 40 units of corn and 20 units of wheat.
d. 10 units of corn and 40 units of wheat.

Answer 1

Answer:

a 30 units of corn and 30 units of wheat.

Explanation:

Initially freedonia has 5 workers producing 30 units of of corn (6 units per worker) and another 5 workers producing 10 units of wheat (2 units per worker)

With the trade agreed between the two countries Freedonia can have all of it's 10 workers producing corn, thereby producing 60 units of corn

30 of these are traded for 30 units of wheat therefore allowing the country to consume 30 units of each product.