The Tables Give Production Possibilities Data for Two Countries, Alpha

question 118

Multiple Choice

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. Beta

• A)should specialize in catching fish and trade with Alpha for chips.
• B)should specialize in producing chips and trade with Alpha for fish.
• C)will not realize gains from specialization and trade.
• D)will export both fish and chips to Alpha.

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Definitions:

Demand Function

A mathematical expression that describes the relationship between the quantity of a good demanded and its price, along with other factors such as income and prices of related goods.

Market Demand Curve

Represents the total quantity of a good that all consumers in a market are willing and able to purchase at each possible price over a period of time.

Individual Demand Curves

Graphical representations showing the relationship between the quantity of a good that a single consumer would buy at each price.

Price Elasticity

Measures the responsiveness or sensitivity of the quantity demanded for a product to a change in its price.