The Following Table Indicates the Production Possibilities of Food and Clothing

question 36

Multiple Choice

The following table indicates the production possibilities of food and clothing per worker day in the United States and Japan.
Which of the following is true?

• A) No gains from trade are possible.
• B) Joint output would be maximized if the United States specialized in producing clothing and Japan in producing food.
• C) Mutual gains from trade could be realized if the United States specialized in food production and Japan in clothing production.
• D) The Japanese are the high-cost producers of both food and clothing.

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Definitions:

Noncash Asset

Assets owned by a business not in the form of cash but may be converted into cash within a year, such as inventory and property.

Change in Cash

The difference in a company's cash balance over a specified period, indicating the net increase or decrease in cash.

Net Income

The total earnings of a company after all expenses and taxes have been subtracted from total revenue.

Related Party Transaction

Financial transactions between entities that are considered to have a special relationship, such as companies with common ownership.