The Maximum Production Possible in Rome and in Cathay Are

question 148

Multiple Choice

The maximum production possible in Rome and in Cathay are as follows:

-If each country is self-sufficient (no trade) and each allocates one half of its resources to producing each of the two products,what is the combined output in the two counties?

• A)60 bread and 60 figs.
• B)60 bread and 0 figs.
• C)0 bread and 60 figs.
• D)30 bread and 30 figs.

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Definitions:

Break-even Point

The point at which total costs and total revenues are equal, meaning that a business, project, or investment is neither making a loss nor a profit.

Normal Profit

The minimum profit necessary for a company to remain competitive in the market; it corresponds to the opportunity cost of capital.

Product Price

The amount of money charged for a product or service, determined by factors such as cost of production, market demand, and competition.

Curve Steepness

The rate at which the slope of a curve increases or decreases, often used in economics to describe the sensitivity of one variable to another.