(Table) Based on the Table for Macrostan and Econostan, What

question 87

Multiple Choice

(Table) Based on the table for Macrostan and Econostan, what would the total output of cheese and wool be across the two countries if each specializes completely in the production of the good for which it has the comparative advantage?

• A) 152 million tons of cheese and 180 million tons of wool
• B) 180 million tons of cheese and 160 million tons of wool
• C) 190 million tons of cheese and 142 million tons of wool
• D) 200 million tons of cheese and 160 million tons of wool

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Definitions:

Actual Market Share

The real or actual percentage of a market controlled by a company or product, measured by sales volume or revenue.

Demand Curve

This reflects how the quantity demanded of a good or service varies with changes in its price, typically sloping downward from left to right.

Network Externalities

The effect that additional users of a good or service have on the value of that product to others, where increased usage can enhance value.

Externality

An economic term referring to a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved.