Consider the Following Information, and Assume That Opportunity Costs Are

question 258

Multiple Choice

Consider the following information, and assume that opportunity costs are constant: On one hand, residents of Country A can produce more corn in a year than residents of Country B, but they can produce computers at a lower opportunity cost than residents of country B. On the other hand, residents of country B can produce more computers in a year than residents of Country A, but they can produce corn at a lower opportunity cost than residents of country A. It can be concluded that residents of

• A) Country A should produce corn and trade it for computers produced in Country B.
• B) Country B should produce computers and trade them for corn produced in Country B.
• C) Country A should produce computers and trade them for corn produced in Country B.
• D) both countries should choose not to trade.

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Definitions:

Economic Efficiency

A state in which resources are allocated in a way that maximizes the total benefits received by all individuals in an economy.

Benefits

Advantages or payments made to individuals or employees, which can include health insurance, retirement plans, and other perks beyond basic salaries.

Costs

The expenses incurred in the process of producing or providing goods and services.

Efficiency Standpoint

A perspective from which actions are evaluated based on their ability to achieve the highest output with the least waste of resources.