Assume That by Devoting All of Its Resources to the Production

question 153

Multiple Choice

Assume that by devoting all of its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all of its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y. We can conclude that

• A)the terms of trade will be 3X equals 1Y.
• B)Alpha should specialize in Y and Beta in X.
• C)Alpha should specialize in X and Beta in Y.
• D)there is no basis for mutually beneficial specialization and trade.

Identify and utilize specialized legal research platforms such as Westlaw and Lexis.

Apply effective search techniques to locate legal information online.

Recognize the utility of various legal databases and directories for researching law-related inquiries.

Distinguish between different types of legal materials and resources available on the internet.

---

Definitions:

Efficient Market Hypothesis

A theory that suggests market prices fully reflect all available information, making it impossible to consistently achieve higher than average returns.

Random Walk

The hypothesis that stock market prices evolve according to a random path, making it impossible to consistently predict their future direction.

Index Funds

A type of mutual fund with a portfolio constructed to match or track the components of a financial market index, such as the S&P 500, aiming to offer broad market exposure, low operating expenses, and low portfolio turnover.

Moral Hazard

A situation where one party engages in risky behavior or fails to act in good faith because another party bears the consequences or costs.