Scenario: Norway and Sweden Each Produce Cloudberries (CB) and Salted

question 249

Multiple Choice

Scenario: Norway and Sweden each produce cloudberries (CB) and salted cod (SC) . Their production possibilities curves for these two goods are shown below.

Production Possibilities: Norway and Sweden (thousands of kilos)

Opportunity Costs: Norway and Sweden

-Refer to the scenario above.If the terms of trade are 1.5 kilos of cloudberries for a kilo of salted cod,the terms of trade are ________.

• A) not advantageous for either Norway or Sweden
• B) advantageous for Norway but not for Sweden
• C) advantageous for Sweden but not for Norway
• D) advantageous for both Norway and Sweden

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Definitions:

Large Lots

Bulk quantities of goods, often purchased or produced to achieve economies of scale but can lead to increased storage costs and risks.

Fixed Cost

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent or salaries.

Managerial Levers

The tools or mechanisms that managers can use to control, influence, or adjust processes in pursuit of organizational objectives.

Large Lots

A production or purchasing strategy focusing on creating or buying goods in bulk quantities to benefit from economies of scale, despite the risk of increased inventory holding costs.