Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. Which of the following exchange rates between apples and oranges would allow both Alpha and Omega to gain by specialization and exchange?
a. 1 ton of oranges for 1/3 of a ton of oranges
b. 1 ton of apples for 3 1/3 tons of oranges
c. 1 ton of apples for 2 tons of oranges
d. 1 ton of oranges for 0.4 tons of apples
b
Exhibit 18-2
Economics
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The aggregate supply curve would shift downward if
a. unit costs increase due to an increase in output b. the wage rate increases c. good weather increases crop yields d. an increase in real GDP causes the price level to decrease e. an oil embargo causes world oil prices to rise
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