On the Basis of the Information Provided and Assuming Trade

question 48

Multiple Choice

On the basis of the information provided and assuming trade occurs between the three provinces we can expect:

• A)Alberta to exchange apples with Ontario and receive money in return.
• B)Alberta to exchange apples with British Columbia and receive money in return.
• C)Ontario to exchange lettuce with British Columbia and receive autos in return.
• D)none of the above to occur.

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Opportunity Cost

The benefit that is missed or foregone when choosing one alternative over another.

Excess Capacity

A situation where a company's production facilities are capable of producing more than the demand for its products or services.

Direct Expenses

Costs that can be directly attributed to the production of specific goods or services, such as raw materials and direct labor.