-In the figure above, suppose that Mac and Izzie trade and reach point c. Then
A) Mac and Izzie should both produce at point a.
B) Mac and Izzie should both produce at point c.
C) Mac should produce at point b and Izzie should produce at point d.
D) Mac should produce at point d and Izzie should produce at point b.

Question

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then
A) Mac and Izzie should both produce at point a. 
B) Mac and Izzie should both produce at point c. 
C) Mac should produce at point b and Izzie should produce at point d. 
D) Mac should produce at point d and Izzie should produce at point b.

Quizplus · Accepted Answer

If Mac and Izzie trade and reach point c, it implies that they are specializing in production according to their comparative advantages. Therefore, Mac should produce at point b and Izzie should produce at point d to maximize their combined output and benefit from trade.

-In the Figure Above, Suppose That Mac and Izzie Trade