Table 3-6 Assume That Hilda and Carlos Can Switch Between Producing Quilts

question 246

Multiple Choice

Table 3-6
Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate.

-Refer to Table 3-6.Assume that Hilda and Carlos each has 90 hours available.Originally,each person divided their time equally between the production of quilts and dresses.Now,each person spends all their time producing the good in which they have a comparative advantage.As a result,the total output of dresses increased by

• A) 3.5.
• B) 4.5.
• C) 5.5.
• D) 9.

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Definitions:

Privatization

The transfer of ownership and management of enterprises from the public sector (government) to private individuals or organizations.

Command Economy

An economic system where the government has primary control over the production and distribution of goods and services.

Market Economy

An economic system where the prices of goods and services are determined in a free price system, primarily through supply and demand.

Nationalization

The process by which governments take private assets into public ownership, usually key industries or resources.