Test: AP Macroeconomics

1.

Countries A & B can produce the following maximum quantities of cars and computers (when they use all their resources to produce one of the goods):

Country A: 500 computers OR 200 cars

Country B: 300 computers OR 100 cars

 

If these countries were to trade, which of the following options give the trade outcomes that would result?

Country B would produce most of the cars and Country A would produce most of the computers

Country A would produce more cars and more computers and trade them with Country B since they have a comparative advantage in producing both goods 

There would be no agreeable terms of trade since Country A produces more cars and more computers than Country B does.

There is not enough information to answer the question as stated

Country A would produce most of the cars and Country B would produce most of the computers

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