Table 3-11 Assume That Falda and Varick Can Switch Between Producing Wheat

question 184

Multiple Choice

Table 3-11
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.

-Refer to Table 3-11.Varick has an absolute advantage in the production of

• A) wheat.
• B) cloth.
• C) both goods.
• D) neither good.

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Definitions:

Economic Profit

The difference between total revenues and the total costs of a firm, including both explicit and implicit costs.

Gas Station

A retail business establishment that sells fuel and engine lubricants for motor vehicles.

Prices Charged

The amount of money demanded by a business in exchange for its goods or services.

Long Run

A period during which all factors of production and costs are variable, allowing firms to adjust to desired levels.