Table 3-22
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
-Refer to Table 3-22. Zimbabwe and Portugal would not be able to gain from trade if Zimbabwe's opportunity cost of one toothbrush changed to
A)0 hairbrushes.
B)5/6 hairbrushes.
C)6/5 hairbrushes.
D)Zimbabwe and Portugal can always gain from trade regardless of their opportunity costs.

Question

Table 3-22
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. 
-Refer to Table 3-22. Zimbabwe and Portugal would not be able to gain from trade if Zimbabwe's opportunity cost of one toothbrush changed to
A)0 hairbrushes. 
B)5/6 hairbrushes. 
C)6/5 hairbrushes. 
D)Zimbabwe and Portugal can always gain from trade regardless of their opportunity costs.

Quizplus · Accepted Answer

According to the table, Zimbabwe's opportunity cost of one toothbrush is 2 hairbrushes, while Portugal's opportunity cost of one toothbrush is 3 hairbrushes. If Zimbabwe's opportunity cost of one toothbrush changed to 0 hairbrushes, then Zimbabwe would be able to produce an infinite number of toothbrushes without giving up any hairbrushes. In this case, there would be no incentive for Zimbabwe to trade with Portugal. However, if Zimbabwe's opportunity cost of one toothbrush increased to 5/6 hairbrushes or higher, then Zimbabwe would be better off producing and selling hairbrushes instead of toothbrushes, and importing toothbrushes from Portugal in exchange. This would allow Zimbabwe to consume more toothbrushes and hairbrushes than it could produce on its own, resulting in gains from trade. Therefore, B is the best choice.

Table 3-22 Assume That Zimbabwe and Portugal Can Switch Between Producing Toothbrushes