What would be a beneficial term of trade for both Country X and Country Y assuming specialization?

To determine a beneficial term of trade for both Country X and Country Y, it is essential to consider the concept of comparative advantage and how each country benefits from specialization in trade. In this scenario, a beneficial term of trade is one that allows each country to trade according to their strengths and still gain more of the goods they need than if they produced everything on their own.

The option stating "1 ton of bananas for 4 tons of steel" suggests that for every ton of bananas Country X exports, it can receive an advantageous exchange of four tons of steel from Country Y. This is beneficial because it provides Country X with a favorable outcome, as they are gaining a larger quantity of steel per ton of bananas traded, compared to other options available.

These terms would likely allow Country X to focus on banana production if it has a comparative advantage in bananas, while Country Y could focus on steel production. Each country ends up better off by trading according to their respective advantages, thereby maximizing their resources and outputs.

In contrast, other options do not provide such favorable terms for both countries. They may either offer less quantity in exchange or result in a less advantageous situation where one country could produce or trade more efficiently, potentially leading to losses in overall benefits from