In Samoa the opportunity cost of producing 1 coconut is 4 pineapples, while in Guam the opportunity cost of producing 1 coconut is 5 pineapples. In this situation:
a. if trade occurs, both countries will be able to consume beyond their original production possibilities frontiers.
b. Guam will be better off if it exports coconuts and imports pineapples
c. both Samoa and Guam will be better off if Samoa produces both coconuts and pineapples.
d. mutually beneficial trade cannot occur.
a
You might also like to view...
Which of the following describes the "invention" of banking?
A) Clergy in the Renaissance created the banking system to help further the growth of the church. B) Goldsmiths in the sixteenth century issued gold receipts which entitled its owners to reclaim their gold on demand. C) The United States government founded the Federal Reserve in 1913. D) The British Empire created a banking system to fund its exploration of the New World. E) Members of the New York Stock Exchange founded the Bank of America in the 1700s.
An individual will be considered risk neutral if:
a. he is indifferent between taking and not taking up the gamble. b. he pays someone to take away the gamble from him. c. he pays someone to allow him to take the gamble. d. he takes up the gamble under any situation.
Other things being equal, the effect of an increase in the price of milk would be illustrated by
a. an upward movement along the demand curve for milk. b. a leftward shift in the demand curve for milk. c. a downward movement along the demand curve for milk. d. a rightward shift in the demand curve for milk.
Which of the following is not true about the information and advice investment bankers provide to clients?
A. It is highly valued if the fees paid for it are any indication of its value. B. It is often used to identify possible acquisition and merger candidates. C. It is public information that the bank compiles and makes available to anyone. D. It helps improve the allocation of resources across the economy.