Table 3-7 Assume That Japan and Korea Can Switch Between Producing Cars

question 311

Multiple Choice

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-7.We could use the information in the table to draw a production possibilities frontier for Japan and a second production possibilities frontier for Korea.If we were to do this,measuring cars along the horizontal axis,then

• A) the slope of Japan's production possibilities frontier would be -5 and the slope of Korea's production possibilities frontier would be -3.
• B) the slope of Japan's production possibilities frontier would be -0.2 and the slope of Korea's production possibilities frontier would be -0.33.
• C) the slope of Japan's production possibilities frontier would be 0.2 and the slope of Korea's production possibilities frontier would be 0.33.
• D) the slope of Japan's production possibilities frontier would be 5 and the slope of Korea's production possibilities frontier would be 3.

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Definitions:

Labor Costs

The total expenditure incurred by employers for the compensation of employees, including wages, benefits, and taxes.

Production Function

An equation or model that describes the relationship between inputs used in production and the output of goods or services.

Capital

The financial assets or resources that businesses and individuals use to invest, produce goods and services, including buildings, machinery, and equipment.

Output

The quantity of goods or services produced in a given period by a firm, industry, or country.