1. Using the graphs above, a GOOD terms of trade falls between:
A) 1 truck : 1 car to 1 truck : 1 car
B) 1 truck : 1 car to 1 truck : 2 cars
C) 1 truck : 1 car to 1 truck : 3 cars
D) 1 truck : 1 car to 1 truck : 4 cars
E) Both B) and C) are correct.
2. Shown in the graphs above are a BAD terms of trade. What are the terms of trade?
A) 1 truck : 1 car
B) 1 truck : 2 cars
C) 1 truck : 3 cars
D) 1 truck : 4 cars
E) 1 truck : 5 cars
3. If the terms of trade are 1 truck for 1 car, which country will be hurt by this?
A) Country A only.
B) Country B only.
C) Both countries will be hurt.
D) Neither country will be hurt.
E) Cannot be determined.