Assume That by Devoting All Its Resources to the Production

question 111

True/False

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all its resources to Y, Alpha can produce 60 Y. Comparable figures for nation Beta are 60 X and 40 Y. Beta would prefer terms of trade at, or close to, 1X = 1½Y.

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