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Production possibilities ior two producers and merchants, Eric and Stan, are shown in the table below. Suppose both Eric and Stan are initially independent producers.
Production possibilities ior two producers and merchants, Eric and Stan, are shown in the table below. Suppose both Eric and Stan are initially independent producers. Eric is producing 240 loaves of bread and 3t] logs of wood. Stan is producing 180 logs of wood and 45 loaves of bread. Eric's Production Possibilities {monthly} Stan's Production Possibilities tmonthly] Bread (loaves: Wood {logs} Bread {loaves} Wood [logs]: 300 U 225 t] 130 45 135 9t] 90 135 45 180 l] 225 Eric and Stan are considering an arrangement oi specialization and trade. If they specialize according to comparative advantage and agree on a trade of45 loaves of bread for 30 logs of wood, then C) A. Stan will have the same number of logs of wood. but he will have more loaves of bread. O B. Stan will produce 225 logs of wood, keep 135, and trade 90 to Eric in exchange for 120 loaves of bread. C) C. Eric will have the same number of logs of wood as he did initially, but he will have more loaves of bread. 0 D. Eric will produce 300 loaves of bread, keep 150, and trade 15 to Stan in exchange for 75 logs of wood
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