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

question 144

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.If the terms of trade are established as 1 ton of apples for 2 tons of oranges:

• A) there are no incentives for Omega to engage in international specialization and trade of apples and oranges.
• B) it is in the interest of Omega to grow oranges and trade for apples.
• C) it is in the interest of both countries to specialize and trade with one another.
• D) there are no incentives for Alpha to specialize and trade with Omega.

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