Exhibit 28-1 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.
Refer to Exhibit 28-1.Which of the following exchange rates between apples and oranges would allow both Alpha and Omega to gain by specialization and exchange?

Question

Quizplus · Accepted Answer

Alpha's opportunity cost for 1 ton of apples is 2 tons of oranges, and Omega's opportunity cost for 1 ton of apples is 4 tons of oranges. An exchange rate of 1 ton of apples for 3 tons of oranges allows both to benefit, as it is between their opportunity costs.

Exhibit 28-1 Alpha Can Produce Either 18 Tons of Oranges