Use the Following to Answer Question(s): Production Possibilities in Alphaland

question 169

Multiple Choice

Use the following to answer question(s) : Production Possibilities in Alphaland and Omegaland

-(Exhibit: Production Possibilities in Alphaland and Omegaland) Which of the following statements is true?

• A) Because of trading, all people in Omegaland will benefit in the short run.
• B) Because of trading, all people in Alphaland will benefit in the short run.
• C) The final terms of trade could be 4/5 computer for 1 car.
• D) The final terms of trade could be 3 computers per car.

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Definitions:

Availability Heuristic

The availability heuristic is a cognitive bias wherein individuals judge the likelihood of events based on their ability to easily recall examples, rather than on objective information or statistical probability.

Homeowners' Policies

Insurance contracts that offer property and liability coverage to individuals owning homes, protecting against various perils.

Insurance Salespeople

Professionals who specialize in selling insurance policies to protect individuals and businesses from financial loss.

Representativeness Heuristic

A cognitive shortcut that involves making judgments about the probability of an event under uncertainty, based on how much it resembles the typical case.