Scenario: Consider Two Economies, Beta and Zeta

question 80

Multiple Choice

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
-Refer to the scenario above.Which of the following statements is true in this case?

• A) Beta and Zeta will suffer losses if they engage in foreign trade.
• B) Zeta has an absolute advantage in producing both oranges and apples.
• C) Beta has a comparative advantage in producing both oranges and apples.
• D) Zeta should specialize in producing oranges, and Beta should specialize in producing apples.

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Definitions:

Family of Four

A household unit consisting of four members, commonly used as a standard demographic model for analysis and policy-making.

William Julius Wilson

A sociologist from America who is recognized for his contributions to urban sociology, as well as his studies on race and socio-economic class within the United States.

Middle-Class

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Black Working-Class

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