Assume That Maximum Feasible Hourly Productions Levels If All Resources

question 225

Multiple Choice

Assume that maximum feasible hourly productions levels if all resources are utilized in the United States are either 8 yards of fabric or 4 bushels of wheat. Maximum feasible production levels if all resources are utilized in Japan are either 3 yards of fabric or 6 bushels of wheat. Based on this information

• A) beneficial trade is absolutely impossible between the two countries.
• B) the United States will benefit from trading but Japan will not.
• C) both nations will gain from specialization and trade, with the United States exporting wheat and Japan exporting fabric.
• D) both nations will gain from specialization and trade, with the United States exporting fabric and Japan exporting wheat.

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Definitions:

Total Profit

The sum of net gains, representing the total revenue from transactions minus the total costs associated with those transactions.

Enlarge

To make something larger or expand in size, scale, or scope.

Government Failure

A situation where government intervention in the economy causes more harm than good, leading to inefficient outcomes.

Inefficient Use

The situation where resources are not being used in the best possible manner, where potential output is not maximized.