Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland

-(Exhibit: Production Possibilities in Alphaland and Omegaland) Before trade in Omegaland, ________ car could exchange for ________ computer.

Question

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland
 
-(Exhibit: Production Possibilities in Alphaland and Omegaland) Before trade in Omegaland, ________ car could exchange for ________ computer.

Quizplus · Accepted Answer

Before trade, the exchange rate in Omegaland would be based on its own production possibilities. If Omegaland can produce cars and computers at a ratio that implies 1 car could exchange for 1/5 of a computer, it reflects their internal opportunity cost of producing these goods.

Use the Following to Answer Question(s): Production Possibilities in Alphaland