Consider Two Countries That Can Produce Wheat and Coffee

question 59

Multiple Choice

Consider two countries that can produce wheat and coffee.The gains from trade when the two countries have different opportunity costs are realized when

• A)production possibility boundaries shift inward.
• B)the two countries continue to produce the same quantities of wheat and coffee.
• C)each country has an absolute advantage in one of the two commodities.
• D)resources are reallocated within the two countries such that each specializes in the production of the good in which it has an absolute advantage.
• E)resources are reallocated within the two countries such that each specializes in the production of the good in which it has a comparative advantage.

Determine the profit-maximizing quantity of output based on marginal costs and market price.

Identify the role of market prices in determining a firm's supply decisions.

Interpret the effects of market conditions on a firm’s profit and production decisions.

Understand the optimal output rule and its application in perfect competition.

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Definitions:

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The power assumed to be held by an agent or employee, based on their role or position, allowing them to perform acts necessary to fulfill their duties.

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The skills, techniques, and art involved in effectively persuading and selling goods or services to consumers.

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A compensation structure where payments are made based on performance, typically a percentage of sales generated.

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The termination of employment by an employer, often due to misconduct, poor performance, or economic constraints.