Table 14-3 Karl Can Produce Either 10 Tonnes of Oranges or 5

question 108

Multiple Choice

Table 14-3
Karl can produce either 10 tonnes of oranges or 5 tonnes of apples in a year, while Adam can produce either 5 tonnes of oranges or 10 tonnes of apples.
-Refer to Table 14-3.If the exchange rate between apples and oranges in international markets is 1 tonne of apples per 3 tonnes of oranges,how will this affect trade between Karl and Adam?

• A)Karl and Adam will trade apples and oranges with one another.
• B)Karl and Adam will not trade apples and oranges with one another, since both will specialize in and export oranges.
• C)Karl and Adam will not trade apples and oranges with one another, since both will specialize in and export apples.
• D)Karl and Adam will not engage in international trade.

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Definitions:

Fisheries Value

The economic value derived from the activities of capturing or cultivating fish and other aquatic resources.

Natural Monopoly

A market condition where a single firm can supply a product or service to an entire market at a lower cost than two or more firms could, often due to high infrastructure or fixed costs.

Per-unit Costs

The average cost incurred in the production of one unit of a good or service, including both fixed and variable costs.

Number Of Producers

The total count of entities or individuals that manufacture or produce goods and services within an economy.