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The Accompanying Tables Give Production Possibilities Data for Gamma and Sigma

Question 239

Multiple Choice

The accompanying tables give production possibilities data for Gamma and Sigma. All data are in tons. Gamma's production possibilities
ABCDE Tea 1209060300 Pots 0306090120\begin{array}{c|c|c|c|c|c} & \mathrm{A} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} \\\hline \text { Tea } & 120 & 90 & 60 & 30 & 0 \\\hline \text { Pots } & 0 & 30 & 60 & 90 & 120 \\\hline\end{array} Sigma's production possibilities
ABCDE Tea 403020100 Pots 0306090120\begin{array}{c|c|c|c|c|c} & \mathrm{A} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} \\\hline \text { Tea } & 40 & 30 & 20 & 10 & 0 \\\hline \text { Pots } & 0 & 30 & 60 & 90 & 120 \\\hline\end{array} Assume that before specialization and trade, Gamma and Sigma both chose production possibility "C." Now if each specializes according to comparative advantage, the gains from specialization and trade will be


A) 40 tons of pots.
B) 20 tons of tea and 20 tons of pots.
C) 20 tons of tea.
D) 40 tons of tea.

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