Assume that the North and the South can switch between producing cars and producing airplanes at a constant opportunity cost. The following table shows the number of labor hours needed to produce 1 car or 1 airplane in each country:

Country Car Airplane

North 30 hours 150 hours

South 50 hours 150 hours

Assume that the North and the South each have 2,400 of labor hours available. Without trade, the North produced and consumed 50 cars and 6 airplanes, and the South produced and consumed 27 cars and 7 airplanes. Then, each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 28 cars for 8 airplanes. As a result, the North gained:_____.

a. cars and 2 airplanes.

b. 2 cars and 2 airplanes.

c. cars and airplanes since this is not a mutually beneficial terms of trade.

e. 3 cars and 3 airplanes.