SCENARIO: CHILE AND ARGENTINA

question 15

Multiple Choice

SCENARIO: CHILE AND ARGENTINA
Chile and Argentina each produce jellybeans and peanut butter, using
Labor as their only resource.Each country has 1,000 hours of labor.In
Chile, an hour produces a pound of jellybeans and 2 hours produce a
Pound of peanut butter.In Argentina, an hour produces a pound of
Jellybeans and 3 hours produces a pound of peanut butter.When they do
Not trade with each other, Chile consumes 600 pounds of jellybeans and
200 pounds of peanut butter, and Argentina consumes 400 pounds of
Jellybeans and 200 pounds of peanut butter.
Reference: Ref 2­10
(Scenario: Chile and Argentina) Suppose that Chile and Argentina begin
To trade with one another.Each completely specializes in the product in
Which it finds its comparative advantage.How many pounds of peanut
Butter and jellybeans do the two countries jointly produce?

• A)1,000 pounds of jellybeans and 400 pounds of peanut butter
• B)1,000 pounds of jellybeans and 500 pounds of peanut butter
• C)500 pounds of jellybeans and 1,000 pounds of peanut butter
• D)333.33 pounds of jellybeans and 500 pounds of peanut butter

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Definitions:

Cost Drivers

Factors that cause the cost of an activity or process to change, which can include the volume of units produced, labor hours, or machine hours.

Vocational School

An educational institution that provides practical and skills-based training aimed at preparing students for specific trades or careers.

Budgets

Financial plans that estimate revenue and expenses over a specified future period of time, often used for planning and controlling financial performance.

Variable Cost Estimates

Projections of costs that vary directly with the level of output or production volume.