Use the Following to Answer Question

question 208

Multiple Choice

Use the following to answer question:
-(Table: The Production Possibilities for Tractors and Crude Oil) Use Table: The Production Possibilities for Tractors and Crude Oil.Both the United States and Mexico will gain from trade if one tractor trades for _____ barrels of oil.

• A)1,500
• B)4,500
• C)6,500
• D)8,500

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor costs.

Net Income

The total profit of a company after subtracting all expenses from revenues.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Fixed Costs

Fixed costs are business expenses that do not change with the level of output or sales, such as rent or salaries.