(Table) Given the Production Possibilities Schedules for the United States

question 150

Multiple Choice

(Table) Given the production possibilities schedules for the United States and Chile, which product should Chile produce if it is to produce the good for which it has a comparative advantage? $$\begin{array}{l}\text { U.S. Production Possibilities }\\\begin{array} { c c c } & \begin{array} { c } \text { Bread } \\\text { (loaves) }\end{array} & \begin{array} { c } \text { Avocados } \\\text { (bushels) }\end{array} \\\text { A } & 100 & 0 \\\text { B } & 80 & 10 \\\text { C } & 60 & 20 \\\text { D } & 40 & 30 \\\text { E } & 20 & 40 \\\text { F } & 0 & 50 \\& & \\& \text { Chile Production Possibilities } \\& \text { Bread } & \text { Avocados } \\& \text { (loaves) } & \text { (bushels) } \\\text { G } & 15 & 0 \\\text { H } & 12 & 12 \\\text { I } & 9 & 24 \\\text { J } & 6 & 36 \\\text { K } & 3 & 48 \\\text { L } & 0 & 60\end{array}\end{array}$$

• A) bread
• B) avocados
• C) neither bread nor avocados
• D) both bread and avocados

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Definitions:

Freedom To Farm Act

A law passed in 1996 in the United States designed to phase out certain agricultural subsidies and give farmers more planting flexibility.

Transition Payments

Payments made to individuals or companies to facilitate adjustment to a new economic condition or policy.

Price Supports

Government interventions or policies to maintain the price of a commodity at a certain level to protect producers from price fluctuations.

Food, Conservation, And Energy Act

A comprehensive piece of legislation passed in the United States that governs agricultural and food policy, aimed at promoting conservation, energy efficiency, and food security.