worker in Pakistan can produce either 5 units of food per day or 15 yards of cloth. A worker in India can produce either 1 food per day or 5 yards of cloth. Trade between India and the Pakistan would definitely occur where the price of food in terms of cloth (terms of trade) is: a. Pf/ Pc = 7 or 1F = 7C. b. Pf/ Pc = 6 or 1F = 6C c. Pf/ Pc = 2 or 1F = 2C. d. Pf/ Pc = 4 or 1F = 4C. e. None af the above.

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Chapter12: Money, Banking And The Financial System
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Choose one from the following:

A worker in Pakistan can produce either 5 units of food per day or 15 yards of cloth. A worker in India can produce either 1 food per day or 5 yards of cloth.

Trade between India and the Pakistan would definitely occur where the price of food in terms of cloth (terms of trade) is:

a. Pf/ Pc = 7 or 1F = 7C.

b. Pf/ Pc = 6 or 1F = 6C

c. Pf/ Pc = 2 or 1F = 2C.

d. Pf/ Pc = 4 or 1F = 4C.

e. None af the above.

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