Table 31.1.1 Glazeland's Doughnut Market

question 93

Multiple Choice

Table 31.1.1
Glazeland's Doughnut Market

-Table 31.1.1 shows Glazeland's doughnut market before international trade. Glazeland opens up to international trade. If the world price is $0.40, then Glazeland will produce ________ doughnuts and will ________ doughnuts.

• A)3 million; import 3 million
• B)3 million; export 3 million
• C)4 million; import 1 million
• D)4 million; export 1 million
• E)6 million; export 3 million

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Definitions:

Advertising

The activity of promoting products or services to potential customers through various channels.

Variable Costs

Costs that change in proportion to the level of goods or services produced.

Contribution Margin Ratio

The percentage of each sales dollar that contributes to covering fixed costs and generating profit.

Pre-tax Income

The total earnings of a company before any taxes have been deducted, often considered when assessing the profitability of a company.