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. If the terms of trade are established as 1 ton of apples for 4 tons of oranges:
a. there are no incentives
for Omega to engage in international specialization and trade with Alpha.
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 or Omega to specialize and trade with one another.
Answer: a
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Indicate whether the statement is true or false
The difference between the utility of expected income and expected utility from income is
A) zero because income generates utility. B) positive because if utility from income is uncertain, it is worth less. C) negative because if income is uncertain, it is worth less. D) that expected utility from income is calculated by summing the utilities of possible incomes, weighted by their probability of occurring, and the utility of expected income is calculated by summing the possible incomes, weighted by their probability of occurring, and finding the utility of that figure. E) that the utility of expected income is calculated by summing the utilities of possible incomes, weighted by their probability of occurring, and the expected utility of income is calculated by summing the possible incomes, weighted by their probability of occurring, and finding the utility of that figure.
Consider the same monopoly situation as in the previous question. The firm's profit will be
a. 1,760 b. 1,660 c. 2,264 d. 6,728
A balance of payments surplus occurs when:
A. exports exceed imports. B. the supply of a nation's currency exceeds the demand for the currency at the current exchange rate. C. the demand for a nation's currency exceeds the supply of the currency at the current exchange rate. D. the supply of a nation's currency is equal to the demand for the currency at the current exchange rate.