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.

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Definitions:

Shareholder Model

A theory of corporate governance focusing on maximizing the value for shareholders, often at the expense of other stakeholders.

Ordovician Extinction

A major extinction event that happened about 445 million years ago, marked by significant loss in marine biodiversity, possibly due to climate change and falling sea levels.

Devonian Extinction

A series of global events leading to significant reductions in biodiversity at the close of the Devonian period around 359 million years ago.

Permian Extinction

A prehistoric global event occurring about 252 million years ago, marking the boundary between the Permian and Triassic geological periods, characterized by the most significant extinction event in Earth's history where nearly 90% of marine species and 70% of terrestrial species died out.