-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 should produce at point b and Izzie should produce at point d.
C) Mac should produce at point d and Izzie should produce at point b.
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 and Izzie should both produce at point a. 
B) Mac should produce at point b and Izzie should produce at point d. 
C) Mac should produce at point d and Izzie should produce at point b. 
D) Mac and Izzie should both produce at point c.

Quizplus · Accepted Answer

In a trade situation, each party should produce at the point where they have a comparative advantage, which maximizes their production efficiency before trading. Point b for Mac and point d for Izzie represent these optimal production points, allowing them to trade and potentially reach a more efficient allocation like point c through trade.

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