The Graph Above Shows the PPC for a Country That

question 32

Multiple Choice

The graph above shows the PPC for a country that can produce oil,which is labor intensive,or televisions,which are capital intensive.
The country is currently producing at point A and not trading with the rest of the world.With trade,the world price can be represented by slope of the straight line through Point A.
Which of the following is a true statement?

• A)When this country produces the optimal amount with trade, workers in this country will be better off.
• B)When this country produces the optimal amount with trade, capital in this country will be better off.
• C)When this country produces the optimal amount with trade, both factors of production will be better off.
• D)When this country produces the optimal amount with trade, the income of factors of production will not change.

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Definitions:

Appraiser

A professional who assesses the value of a particular item, often for property, art, or antiques.

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The first owners or proprietors of an asset or property.

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Used cars that were once registered and are now on the market for purchase, typically at a reduced cost compared to brand-new vehicles.