The Production Possibility Frontiers of Northland and Southland Are Given

question 33

Multiple Choice

The production possibility frontiers of Northland and Southland are given.Without trade, Northland produces and consumes 20 apples and 5 bananas and Southland produces and consumes 10 apples and 40 bananas.Could they increase their consumption bundle by changing production and trading?

• A)No; Southland does at least as well at producing both, so it would have no incentive to trade.
• B)Yes; they could gain 75 bananas and 60 apples.
• C)Yes; they could gain up to 60 apples without losing bananas
• D)Yes; they could gain up to 15 bananas without losing apples.

---

Definitions:

Monopolist

An individual or entity that has exclusive control over the production and sale of a product or service, enabling them to potentially manipulate market prices.

Normal Return

A benchmark profit level that represents sufficient compensation for an entrepreneur or business to cover the opportunity cost of capital and labor, without generating economic profit.

Economic Profit

The difference between total monetary revenue and total costs, including both explicit and implicit costs.

Regulatory Agency

A government body responsible for enforcing laws and regulations to protect public interest in specific sectors, such as healthcare, finance, and the environment.