Below Is Production Possibilities Data for the Countries of Mental

question 35

Multiple Choice

Below is production possibilities data for the countries of Mental and Etheric.

-Refer to the information above to answer this question.Suppose that the two countries specialize and engage in free trade and establish the terms of trade at 1 unit of rice cake = 1.5 units of soya milk.If Etheric exports 30 million units of rice cakes to Mental,what will be the consumption combinations for Etheric?

• A)30 million units of soya milk and 55 million units of rice cakes.
• B)45 million units of soya milk and 90 million units of rice cakes.
• C)55 million units of soya milk and 30 million units of rice cakes.
• D)90 million units of soya milk and 45 million units of rice cakes.
• E)10 million units of soya milk and 30 million units of rice cakes.

---

Definitions:

Private Sector

The part of the economy owned and operated by individuals and companies for profit, as opposed to the public sector operated by the government.

Picketing

The act of demonstrating or protesting, often by workers, outside a place of employment to voice grievances or demands.

Statutes

Laws established by a legislative body governing behavior and setting forth the legal responsibilities and duties of parties.

Free Contractual Nature

Describes the principle that parties are free to negotiate and enter into contracts without undue interference or restrictions.