Table 3-3 Assume That Aruba and Iceland Can Switch Between Producing Coolers

question 174

Multiple Choice

Table 3-3
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.
​
​

-Refer to Table 3-3. Assume that Aruba and Iceland each has 120 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is

• A)90 coolers and 120 radios.
• B)27 coolers and 60 radios.
• C)90 coolers and 27 radios.
• D)27 coolers and 90 radios.

---

Definitions:

Marginal Cost

Marginal cost is the change in total cost that arises when the quantity produced is increased by one unit; it is the cost of producing one additional unit of a product.

Quantity Of Output

The total amount of goods or services produced by a firm or economy within a specific period.

Deadweight Loss

A loss of economic efficiency that can occur when the free market equilibrium is not achieved due to market failures or interventions.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of output varies with the level of production.