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. Which of the following exchange rates between apples and oranges would allow both Alpha and Omega to gain by specialization and exchange?
a. 1 ton of oranges for 1/3 of a ton of oranges
b. 1 ton of apples for 3 1/3 tons of oranges
c. 1 ton of apples for 2 tons of oranges
d. 1 ton of oranges for 0.4 tons of apples
b
Exhibit 18-2
You might also like to view...
If a 5 percent reduction in the price of a commodity results in a 3 percent increase in the quantity demanded, demand is said to be
a. perfectly elastic. b. elastic. c. unit elastic. d. inelastic. e. perfectly inelastic.
In the probit model Pr(Y = 1|X1, X2,..., Xk) = ?(?0 + ?1X1 + ?2X2 + ... + ?kXk),
A) the ?'s do not have a simple interpretation. B) the slopes tell you the effect of a unit increase in X on the probability of Y. C) ?0 cannot be negative since probabilities have to lie between 0 and 1. D) ?0 is the probability of observing Y when all X's are 0
Bert faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000 . 10 percent on the next $10,000 . 15 percent on the next $10,000 . 25 percent on the next $10,000 . and 50 percent on all additional income. If Bert earns $75,000 . what is his average tax rate?
a. 20 percent b. 25 percent c. 30 percent d. 36.67 percent
According to the Keynesian consumption function, an increase in disposable income will result in
A) a decrease in consumption. B) an increase in consumption. C) a decrease in investment. D) an increase in investment.