Table 3-1 Assume That John and Jane Can Switch Between Producing Bread

question 53

Multiple Choice

Table 3-1
Assume that John and Jane can switch between producing bread and wine at a constant rate.
-Refer to Table 3-1. Assume that John and Jane each work 24 hours. What happens to total production if instead of each person spending 12 hours producing each good, Jane spends 21 hours producing wine and 3 hours producing bread and John spends 3 hours producing wine and 21 hours producing bread?

• A)The total production of bread and wine each rise.
• B)The total production of bread rises and the total production of wine falls.
• C)The total production of bread falls and the total production of wine rises.
• D)The total production of bread and wine each fall.

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Definitions:

Married Couples

Two individuals legally joined in matrimony, recognized legally, socially, or religiously, who typically share a close personal relationship.

Transitory Income

Income that is temporary or not expected to continue at the same level in the future, often affecting consumer behavior and economic decisions.

Permanent Income

An individual's average lifetime income, estimated as a constant amount that would maintain the consumer's current standard of living.

Life-Cycle Income

The total income an individual expects to earn over their lifetime.