Question

What does point c represent in the context of Marcelina's blend of white corn and yellow corn for making tortilla chips?

1) The amount of white corn (z) and yellow corn (y) needed to make 50 kg of corn
2) The total cost of buying 50 kg of corn
3) The total amount spent on buying white corn and yellow corn
4) The price per kilogram of white corn and yellow corn

Answer 1

Point C represents a production point before trade where worker hours are allocated to the production of oil and corn, with relative production quantities for each country based on hours. It highlights the trade-off and establishes a conversion factor for determining the relative price of the goods.

Step-by-step explanation:

Given the context provided, point C represents a production point for a country before trade occurs, wherein a certain number of worker hours are devoted to the production of two goods, such as oil and corn. In this scenario, Saudi Arabia would allocate 60 worker hours to produce oil, resulting in a certain number of barrels of oil, and with the remaining worker hours, it would produce a smaller quantity of corn. Conversely, at point C', the U.S. economy would allocate a portion of worker hours to oil production and the remainder to produce a larger quantity of corn. The conversion factor or relative price of one good in terms of another can be determined by the amount of one good that can be produced per unit of time and the trade-off between the goods.