Final answer:
After evaluating the production possibilities for both Country A and Country B, the appropriate terms of trade that both countries would likely agree to is 1 unit of Y for 0.75 units of X. Option d is the correct answer.
Step-by-step explanation:
In analyzing the data provided for Country A and Country B, we are looking at their capacities to produce Good X and Good Y. The objective is to find terms of trade—which is the rate at which goods are exchanged—that both countries would find agreeable. The terms of trade must be such that each country feels they are better off trading than producing the goods themselves.
According to the provided data, Country A has the following production possibilities: for Good X, it can produce 9, 60, 30, or 0 units, while sacrificing 0, 30, 60, or 90 units of Good Y respectively. Conversely, Country B can produce 30, 20, 10, or 0 units of Good Y, while giving up 0, 20, 40, or 60 units of Good X.
After reviewing the options provided (a) 1 unit of Y for 0.25 units of X, (b) 1 unit of Y for 1 unit of X, (c) 1 unit of Y for 1.50 units of X, and (d) 1 unit of Y for 0.75 units of X, the most suitable terms of trade would be option d: 1 unit of Y for 0.75 units of X. This is because it falls within the range where both countries gain compared to their own production possibilities and would be a compromise considering both countries' opportunity costs.