If the Two Countries Are at Points a and B

question 53

Multiple Choice

If the two countries are at points A and B in Figure 35.1 and do not trade,what is the total number of motorcycles produced per year?

• A)1,000.
• B)2,000.
• C)3,000.
• D)4,000.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as materials and labor costs.

Fixed Costs

Expenses that do not change with the level of goods or services produced over the short term, such as rent, salaries, and insurances.

Selling Price

The amount of money for which a product or service is sold to customers.

Variable Costs

Costs that vary directly with the level of production or service volume, such as materials and labor.