Samoa could produce either 3 coconuts or 12 pineapples per worker, while Guam could produce either 5 coconuts or 20 pineapples per worker. In this situation:
a. if trade occurs, both countries will be able to consume beyond their original production possibilities frontiers.
b. Guam will be better off if it exports coconuts and imports pineapples
c. both Samoa and Guam will be better off if Samoa produces both coconuts and pineapples.
d. mutually beneficial trade cannot occur.
d
You might also like to view...
A partnership is limited to how many owners?
A) 2 B) 5 C) less than 10 D) There is no limit to the number of owners.
Potential GDP is:
A) minimum amount of output that can be produced given the labor force, capital stock, and technology. B) maximum amount of output that can be produced given the labor force, capital stock, and technology. C) varies over the business cycle. D) none of the above.
Alice Hanson Jones (1980) finds that private nonhuman physical wealth in New England in 1774 was 36.4 pounds sterling per capita. Thus, assuming a capital output ratio of 3:1, Jones estimates that per capita income in New England in 1774 equaled:
a. about 9 pounds sterling. b. about 12 pounds sterling. c. about 45 pounds sterling. d. about 145 pounds sterling.
Consider a firm that uses only one fixed input and one variable input. a . Explain how this firm's TC, TVC, and TFC curves will be affected by a government tax on the fixed input. b. Explain how this firm's TC, TVC, and TFC curves will be affected by a government tax on the variable input