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

question 15

Multiple Choice

(Table) Given the production possibilities schedules for the United States and Chile, which product should the United States 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:

Vertical Integration

A strategy where a company expands its business operations into different steps on the same production path, such as a manufacturer owning its supplier and/or distributor.

Upstream Suppliers

Companies or entities that provide raw materials, components, or services to another company for the production of goods.

Business Strategy

A plan of action designed to achieve a specific set of objectives that ensures the growth and success of an organization.

Extranets

Private networks that use Internet technology and the public telecommunication system to securely share part of a business's information or operations with suppliers, vendors, partners, customers, or other businesses.