Consider the No-Trade Input/output Situation Presented in the Following Table

question 90

Multiple Choice

Consider the no-trade input/output situation presented in the following table and graph for South and North Carolina.Assume that free trade is legal. Input/Output without Trade

• A)3 pounds of butter
• B).33 pounds of butter
• C)1.33 pounds of butter
• D)none of the options

		country
	south carolina	north carolina	total
I. total potintal output
(lbs. or yard; 000,000s)
guns	500	250	750
butter	1,000	750	1,750
II. consumption
(lbs. or yard; 000,000s)
guns	250	200	450
butter	500	150	650

How much does it cost for North Carolina to produce one gun?

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Definitions:

Absorption Costing

A system of accounting that encompasses the full range of manufacturing costs—direct materials, direct labor, and overheads both variable and fixed, within the cost framework of a product.

Break-even Sales

The amount of revenue required to cover total fixed and variable costs, resulting in a net profit of zero.

Eastern Division

A geographical or operational segment of a larger organization designated to cover the eastern part of a country or area.

Fixed Expenses

Regular expenses that do not change in amount, such as rent or salaries.