Table 14-3
Karl can produce either 10 tonnes of oranges or 5 tonnes of apples in a year, while Adam can produce either 5 tonnes of oranges or 10 tonnes of apples.
-Refer to Table 14-3.If the exchange rate between apples and oranges in international markets is 1 tonne of apples per 3 tonnes of oranges,how will this affect trade between Karl and Adam?
A) Karl and Adam will trade apples and oranges with one another.
B) Karl and Adam will not trade apples and oranges with one another, since both will specialize in and export oranges.
C) Karl and Adam will not trade apples and oranges with one another, since both will specialize in and export apples.
D) Karl and Adam will not engage in international trade.
Correct Answer:
Verified
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