Table 13.6 Production and

question 43

Multiple Choice

Table 13.6
Production and
Consumption Production
Without Trade With Trade Denmark and Belize can produce both clocks and hats.Table 13.6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 13.6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Denmark gain compared to the 'without trade' numbers?

• A)30
• B)100
• C)150
• D)900

---

Definitions:

Normal Profits

The level of profit necessary to keep a firm in an industry, equating to the opportunity cost of capital and entrepreneurship.

Marginal Cost

The financial commitment needed for producing an extra unit of a good or service.

Marginal Revenue

The addition to total revenue resulting from the sale of one more unit of a product or service.

ATC

Average Total Cost; the total cost of production (fixed and variable costs combined) divided by the number of units produced.