Figure 3-2 Peru's Production Possibilities Frontier

question 269

Multiple Choice

Figure 3-2
Peru's Production Possibilities Frontier

-Refer to Figure 3-2.Suppose Peru decides to increase its production of rubies by 30.What is the opportunity cost of this decision?

• A) 1/8 emerald
• B) 1/3 emerald
• C) 1 emerald
• D) 3 emeralds

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Definitions:

Free Trade

The unobstructed trade between countries, without tariffs, quotas, or other restrictions.

Gray Market

The trade of legal goods through unauthorized distribution channels, which, while not illegal, is unofficial and may not be supported by the original manufacturer.

Unauthorized Vendors

Sellers who offer goods or services without the official permission or approval from the rightful owners or governing bodies.

Retail Price

The final price at which a product is sold to consumers, typically including markup from wholesale cost.