Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. If the terms of trade are established as 1 apple for 4 oranges, then: there are no incentives for Beta to engage in international specialization and trade with Alpha. it is in the interest of Beta to grow oranges and trade for apples. it is in the interest of both countries to specialize and trade with one another. there are no incentives for Alpha or Beta to specialize and trade with one another.
Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. If the terms of trade are established as 1 apple for 4 oranges, then: there are no incentives for Beta to engage in international specialization and trade with Alpha. it is in the interest of Beta to grow oranges and trade for apples. it is in the interest of both countries to specialize and trade with one another. there are no incentives for Alpha or Beta to specialize and trade with one another.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
32

Transcribed Image Text:QUESTION 32
Alpha can produce either 18 oranges or 9 apples an
hour, while Beta can produce either 16 oranges or 4
apples an hour. If the terms of trade are established
as 1 apple for 4 oranges, then:
there are no incentives for Beta to engage in
international specialization and trade with
Alpha.
it is in the interest of Beta to grow oranges
and trade for apples.
it is in the interest of both countries to
specialize and trade with one another.
there are no incentives for Alpha or Beta to
specialize and trade with one another.
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