Production Possibilities Data for Gamma and Sigma

question 47

Multiple Choice

Production possibilities data for Gamma and Sigma.All data are in tons.
Gamma production possibilities:
Sigma production possibilities:

-On the basis of the above information:

• A) Gamma should export both tea and pots to Sigma.
• B) Sigma should export tea to Gamma and Gamma should export pots to Sigma.
• C) Gamma should export tea to Sigma and Sigma should export pots to Gamma.
• D) Gamma should export tea to Sigma,but it will not be profitable for the two nations to exchange pots.

---

Definitions:

Inverse Demand Function

A mathematical formula that expresses the price of a good or service as a function of the quantity demanded, demonstrating how price is influenced by changes in demand.

Unit Tax

A fixed tax amount applied to each unit of a good or service sold, affecting its selling price and demand.

Total Costs

The complete cost of producing a good or service, including both fixed and variable costs.

Demand Schedule

A table that lists the quantity of a good or service that consumers are willing to buy at different prices.