Answer the question using the accompanying cost ratios for two products, fish (F)and chicken (C), in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and that these are the only two nations in the world.Singsong: 1F = 2CHarmony: 1F = 4CWhich one of the following would not be feasible terms for trade between Singsong and Harmony?

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Quizplus · Accepted Answer

The feasible terms for trade must lie between the opportunity costs of the two countries. Singsong's opportunity cost is 1F = 2C, and Harmony's is 1F = 4C. Therefore, the terms of trade must be between 1F = 2C and 1F = 4C. Option C (1 chicken for 1/5 of a fish) implies 1F = 5C, which is outside this range.

Answer the Question Using the Accompanying Cost Ratios for Two