Table 3-3 Assume That Indonesia and India Can Switch Between Producing Rice

question 350

Multiple Choice

Table 3-3
Assume that Indonesia and India can switch between producing rice and bananas at a constant rate.

-Refer to Table 3-3.At which of the following prices,if any,can India and Indonesia both gain from trade?

• A) 1/5 units of bananas per unit of rice.
• B) 1/3 units of bananas per unit of rice.
• C) 3/5 units of bananas per unit of rice.
• D) None of the above.

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Definitions:

Economic Action

Any decision or behavior by individuals or organizations that involves the generation, distribution, and consumption of goods and services.

Costs

The value of resources sacrificed to achieve a particular objective, such as producing goods or services.

Benefits

Forms of value, such as financial support, goods, or services, provided to individuals or organizations, typically as part of employment or governmental support.

Marginal Benefit Assessment

The evaluation of the additional benefits received from using one more unit of a good or service.