The graph below represents the market for walnuts. Identify the ...

[bucstennis@aim.com]

The graph below represents the market for walnuts. Identify the values of the marginal benefit and the marginal cost at the output levels of 2,000 pounds, 4,000 pounds, and 6,000 pounds.
 
  At each of these output levels, state whether output is inefficiently high, inefficiently low, or economically efficient.

Question 2

Refer to Table 2-11. China has a comparative advantage in the production of
 
  A) digital cameras. B) wheat. C) both products. D) neither product.

[ansleighelindsey]

Answer to Question 1

Output level = 2,000 lbs: marginal benefit = 3.50, marginal cost = 2.50, output is inefficiently low.
Output level = 4,000 lbs: marginal benefit = 3.00, marginal cost = 3.00, output is economically efficient.
Output level = 6,000 lbs: Marginal benefit = 2.50, marginal cost = 3.50, output is inefficiently high.

Answer to Question 2

B

[bucstennis@aim.com]

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