Without Trade, the Consumption Possibilities for Two Nations Are (Assuming

question 45

Multiple Choice

Without trade, the consumption possibilities for two nations are (assuming full-employment) :

• A) outside their production possibilities curve.
• B) inside their production possibilities curve.
• C) along their production possibilities curves.
• D) at a point equal to the world production possibilities curve.

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Definitions:

Private Firms

Businesses that are owned, operated, and managed by private individuals or entities rather than by the government or public.

Consumers

Individuals or groups that purchase goods and services for personal use.

Market System

An economic system where decisions regarding investment, production, and distribution are guided by the price signals created through the forces of supply and demand.

Public Good

A public good is a product or service that is non-excludable and non-rivalrous, meaning it can be consumed by anyone without reducing its availability to others.