Table 3-8 Assume That Huang and Min Can Switch Between Producing Parasols

question 52

Multiple Choice

Table 3-8
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.

-Refer to Table 3-8.The opportunity cost of 1 plate for Min is

• A) 1/3 parasol.
• B) 1/2 parasol.
• C) 2 parasols.
• D) 3 parasols.

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Definitions:

Total Benefit

The sum of all the advantages or gains obtained from a certain action or investment.

Externalities

Economic side effects or consequences that affect someone other than the buyer or seller, can be positive or negative.

Incentives

Motivations or rewards that influence the actions and behaviors of individuals or organizations.

External Benefit

A positive effect or advantage that results from a transaction or activity but benefits a third party who is not directly involved in the transaction.