The following is the hypothetical production possibilities table for Sunnyland in 2012. Assume that initially
there is autarky.
Sunnyland's Production Possibilities Table (in millions of units)
A
B
C
D
Pair of Sunglasses
9
8
5
0
Beach Towels
0
2
4
6
Suppose that Sunnyland is currently producing 5 million beach towels. As well, assume that the world price of
one beach towel is 1.5 pairs of sunglasses, and that Sunnyland now engages in international trade.
Using the above information, answer the following questions by selecting the correct answer.
At the current level of beach towel production, the net benefit from
selling the 5,000,000th beach towel via exporting is equal to
Choose...
Beach towel production should
as
Choose....
At the current level of beach towel production, the marginal cost of
producing the 5,000,000th beach towel is equal to
Choose...
At the current level of beach towel production, the marginal benefit
from selling the 5,000,000th beach towel via exporting is equal to
Choose...