Refer to the Given Diagram, in Which Line AB Is

question 325

Multiple Choice

Refer to the given diagram, in which line AB is the U.S. production possibilities curve and AC is its trading possibilities curve. The international exchange ratio between beef and cheese (terms of
Trade)

• A) is the absolute value of the slope of line AB.
• B) is the absolute value of the slope of line AC.
• C) could lie anywhere between the absolute value of the slopes of lines AB and AC.
• D) cannot be determined on the basis of this information.

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