Use the Production Possibilities Data Below for Honduras and Nicaragua

question 84

Multiple Choice

Use the production possibilities data below for Honduras and Nicaragua to answer the following question(s) . Table 2-2
Refer to Table 2-2. According to the law of comparative advantage, both Honduras and Nicaragua could gain if

• A) Honduras produced all of the apples and oranges and Nicaragua did not produce anything.
• B) Honduras specialized in producing apples, Nicaragua specialized in producing oranges, and they traded.
• C) Honduras specialized in producing oranges, Nicaragua specialized in producing apples, and they traded.
• D) Nicaragua and Honduras were both were self-sufficient and did not trade.

---

Definitions:

Fuel Efficiency

A measure of how effectively a vehicle uses fuel, often expressed as the distance traveled per unit of fuel.

Marginal Social Benefit

The additional benefit received by society from producing one more unit of a good or service.

Marginal Social Cost

The overall expense to society of producing one additional unit of a good or service, including both private costs and any externalities.

Coal Mine Pollution

Environmental contamination resulting from the extraction and processing of coal, including air and water pollution.