The mutually beneficial terms of trade are: 1 ton of coffee for 4 trucks.

Why this is the right answer

From the data (often presented in the original table):

  • China can produce 250 trucks or 50 tons of coffee with the same resources.
    • Opportunity cost of 1 ton of coffee for China = 250/50=5250/50=5250/50=5 trucks.
  • Malaysia can produce 300 trucks or 100 tons of coffee.
    • Opportunity cost of 1 ton of coffee for Malaysia = 300/100=3300/100=3300/100=3 trucks.

For a terms of trade to be mutually beneficial , the “price” of 1 ton of coffee in terms of trucks must lie between the two opportunity costs:

  • More than 3 trucks (so Malaysia gets more than it could by producing trucks itself).
  • Fewer than 5 trucks (so China gives up fewer trucks than it would if it produced the coffee itself).

So any terms of trade between 3 and 5 trucks per ton of coffee benefit both countries.

Among the options you quoted:

  • 1 ton of coffee for 3 trucks → equal to Malaysia’s opportunity cost, not strictly beneficial for both.
  • 1 ton of coffee for 4 trucks → between 3 and 5, so mutually beneficial.
  • 1 ton of coffee for 5 trucks → equal to China’s opportunity cost, not mutually beneficial.
  • 1 truck for 1 ton of coffee or 1 truck for 5 tons of coffee → outside the mutually beneficial range.

So the correct choice is “1 ton of coffee for 4 trucks.”

Information gathered from public forums or data available on the internet and portrayed here.