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

Question

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

Quizplus · Accepted Answer

At point c, Mac's marginal cost is higher than Izzie's. So Mac should specialize in producing the good for which his marginal cost is lower (good x), and Izzie should specialize in producing the good for which her marginal cost is lower (good y).

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