If the Slopes of the Production Possibility Frontiers Involving Sugar

question 242

Multiple Choice

If the slopes of the production possibility frontiers involving sugar and rice in countries A and B are equal

• A) the opportunity cost of producing sugar is less in Country A.
• B) the opportunity cost of producing rice is less in Country B.
• C) specialization does not benefit either country.
• D) each country will produce identical quantities of sugar and rice.

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Definitions:

Cobb-Douglas Utility Functions

A type of utility function used in economics to represent the utility of an individual consumer derived from consuming different amounts of goods or services.

Consumption

The use of goods and services by households or individuals, considered as an economic activity that drives demand and influences economic growth.

Corn

A staple grain used worldwide, serving as a basic food item, a source of livestock feed, and a raw material for biofuel and sweeteners.

Storage

Refers to the act of retaining or securing goods and information for future use.