Suppose That a Worker in Country a Can Produce Either

question 33

Multiple Choice

Suppose that a worker in Country A can produce either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can produce either 18 bananas or 6 tomatoes each year. Country B has 400 workers. Country A specializes in bananas and Country B specializes in tomatoes. Regarding the terms of trade, Country B will accept no _____ than _____ for every _____.

• A) more; 3 bananas; one tomato
• B) less; 3 bananas; one tomato
• C) more; 1 tomato; 3 bananas
• D) less; 1 tomato; 3 bananas

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Definitions:

Total Cost

A comprehensive collection of costs involved in manufacturing goods or services, covering both stable and changeable expenses.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product.

Fixed Costs

Costs that do not change with the level of output produced, such as rent, salaries, and insurance premiums.

Birthday Cakes

Specialized cakes decorated and made to celebrate a person's birthday.