When the absolute price elasticity of demand is greater than 1, demand is

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 apples for 3 tons of oranges b. 3 tons of apples for 3 tons of oranges c. 2 tons of apples for 3 tons of oranges d. 1 ton of oranges for 0.2 tons of apples

Government intervention can serve to stabilize the macro economy by

A. Regulating monopolies and encouraging the equitable distribution of output. B. Reducing inflation and encouraging economic growth. C. Reducing employment and encouraging economic growth. D. Reducing inflation and encouraging the equitable distribution of income.