|
5. As we've already seen, in Country 2 the opportunity cost of a computer is one burrito, while in Country 1 the opportunity cost of a computer is 3 burritos. The very best possible terms of trade Country 2 could ever hope Country 1 to agree to would be Country 1's opportunity cost, or to send 20 computers to Country 1 in exchange for 60 burritos.
The worst terms of trade any country might conceivably accept are those equal to its own opportunity cost, or in the case of Country 2, 20 computers for 20 burritos.
|
| Country 1 |
Country 2 |
| Burr. | Comp. | Burr. | Comp. |
| 150 | 0 | 100 | 0 |
| 120 | 10 | 80 | 20 |
| 90 | 20 | 60 | 40 |
| 60 | 30 | 40 | 60 |
| 30 | 40 | 20 | 80 |
| 0 | 50 | 0 | 100 |
|
