Use the Following to Answer Questions

question 64

Multiple Choice

Use the following to answer questions:
Figure: Rice and Shirts
-(Figure: Rice and Shirts) Use the PPFs shown for the United States and India. With specialization and trade, the United States would produce ________ and India would produce _________.

• A) 50 pounds of rice and 0 shirts; 0 pounds of rice and 35 shirts
• B) 30 pounds of rice and 16 shirts; 11.4 pounds of rice and 15 shirts
• C) 0 pounds of rice and 40 shirts; 20 pounds of rice and 0 shirts
• D) 50 pounds of rice and 40 shirts; 20 pounds of rice and 35 shirts

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Definitions:

Marginal Revenue

Extra income gained by disposing of one additional unit of a good or service.

Marginal Cost

The expense associated with manufacturing an extra single unit of a product or service.

Quantity Sold

This refers to the total amount of a product or service that is sold within a given time period.

Perfect Competitor

An idealized market structure in which many firms sell identical products, there is free entry and exit, and all buyers and sellers are fully informed, leading to efficient outcomes.