Based on your answer to the last question, which of the following prices of trade (that is, the price of wine in terms of jeans) would allow both Germany and Portugal to gain from trade? Check all that apply.

A. 10 pairs of jeans per bottle of wine
B. 17 pairs of jeans per bottle of wine
C. 1 pair of jeans per bottle of wine
D. 9 pairs of jeans per bottle of wine

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Answer :

Larry129 Larry129 · Answer 1 · 2025-02-20T07:29:03-05:00

All of the prices of trade listed can potentially allow both Germany and Portugal to gain from trade.

Germany is more efficient at producing wine, while Portugal is more efficient at producing jeans, and so both countries can benefit from exchanging their goods.
For example, if Portugal sells 10 pairs of jeans for each bottle of wine from Germany, Portugal will receive more jeans than it would have been able to produce on its own, while Germany will receive more wine than it would have been able to produce on its own.
Similarly, if Portugal sells 17 pairs of jeans for each bottle of wine from Germany, Portugal will receive even more jeans than it would have been able to produce on its own, while Germany will receive even more wine than it would have been able to produce on its own.
Similarly, a trade ratio of 1 pair of jeans per bottle of wine or 9 pairs of jeans per bottle of wine could also benefit both countries.

To learn more about The concept of mutually beneficial trade refer to:

https://brainly.com/question/14101399

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