Exhibit 28-1 Alpha Can Produce Either 18 Tons of Oranges

question 182

Multiple Choice

Exhibit 28-1 Alpha can produce either 18 tons of oranges or 9 tons of apples in a year,while Omega can produce either 16 tons of oranges or 4 tons of apples.
Refer to Exhibit 28-1.Which of the following statements is true?

• A) Alpha should export to Omega, but Omega should not export to Alpha.
• B) Since Alpha has an absolute advantage in both goods, no mutual gains from trade are possible.
• C) If Alpha specializes in growing apples and Omega specializes in growing oranges, they could both gain by specialization and trade.
• D) If Alpha specializes in growing oranges and Omega specializes in growing apples, they could both gain by specialization and trade.

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Definitions:

Property

Property is a legally recognized right to possess, use, and dispose of an item, land, or intellectual creation.

Involuntary Dissolution

The forced termination of a corporation or partnership by external action, often by government order.

Insolvent

The state of being unable to pay debts owed, with liabilities exceeding assets.

Fraudulently

Fraudulently means acting in a way intended to deceive or cheat, typically for personal or financial gain.