Question

Spaniards can produce 10 gallons of wine or 8 gallons of olive oil per worker hour. Americans can produce 9 gallons of wine or 6 gallons on olive oil per worker hour. Which of these exchange rates would allow both countries to gain from selling wine in exchange for olive oil?

a. Americans, Spanish
b. Americans, Americans
c. Spanish, Spanish
d. Spanish, Americans

Answer 1

a. Americans, Spanish

Step-by-step explanation:

Particulars Wine Olive Oil Opportunity Opportunity cost of Olive oil

cost of Wine

Spaniards 10 8 0.8 1.25

Americans 9 6 0.67 1.5

From the above table, the first option is correct