\[\begin{array}{l} { ~~~~~~~~~~~~~~~~~~\text { Germany Production Possibilities } } \\ { ~~~~~~~~~~~~~~~~~~~~~~~~~~\text { (Production Alternatives) } } \\ \begin{array} { | l | c | c | c | c | c | c | } \hline \text { Product } & A & B & C & D & E & F \\ \hline \text { Autos } & 0 & 4 & 8 & 12 & 16 & 20 \\ \hline \text { Chemicals } & 40 & 32 & 24 & 16 & 8 & 0 \\ \hline \end{array}\\\\ { ~~~~~~~~~~~~~~~~~~~~~~~\text { U.S. Production Possibilities } } \\ { ~~~~~~~~~~~~~~~~~~~~~~~~~~\text { (Production Alternatives) } } \\ \begin{array} { | l | c | c | c | c | c | c | } \hline \text { Product } & A & B & C & D & E & F \\ \hline \text { Autos } & 0 & 3 & 6 & 9 & 12 & 15 \\ \hline \text { Chemicals } & 60 & 48 & 36 & 24 & 12 & 0 \\ \hline \end{array} \end{array}\] Refer to the accompanying production possibilities tables. Data are in millions of units. Suppose that each nation specialized in producing the product for which it has a comparative advantage and the Terms of trade were set at 3 units of chemicals for 1 unit of autos. In this case, Germany could obtain And consume a maximum combination of 8 million units of autos and

A) 12 million units of chemicals. B) 24 million units of chemicals. C) 36 million units of chemicals. D) 48 million units of chemicals. A) 12 million units of chemicals. B) 24 million units of chemicals. C) 36 million units of chemicals. D) 48 million units of chemicals.

The tables give production possibilities data for two countries, Alpha and Beta, which have populations of equal size. ${ \text { Alpha's production possibilities } }$ $\begin{array}{l} \begin{array} { | l | c | c | c | c | c | } \hline & A & B & C & D & E \\ \hline \text { Fish (Tons) } & 80 & 60 & 40 & 20 & 0 \\ \hline \text { Chips (Tons) } & 0 & 5 & 10 & 15 & 20 \\ \hline \end{array}\\\\\\ { \text { Beta's production possibilities } } \\ \begin{array} { | l | c | c | c | c | c | } \hline & A & B & C & D & E \\ \hline \text { Fish (Tons) } & 240 & 180 & 120 & 60 & 0 \\ \hline \text { Chips (Tons) } & 0 & 10 & 20 & 30 & 40 \\ \hline \end{array} \end{array}$ Assume the production possibilities in Beta double at alternatives A through E, while remaining as Shown in the table for Alpha. As a result, Beta should

A) continue to specialize in producing chips. B) continue to specialize in ?shing. C) no longer specialize and trade. D) specialize both in ?shing and in producing chips and sell the surplus to Alpha. A) continue to specialize in producing chips. B) continue to specialize in ?shing. C) no longer specialize and trade. D) specialize both in ?shing and in producing chips and sell the surplus to Alpha.

$\begin{array}{l} \text { Domestic Market For Steel, Alpha }\\ \begin{array}{|c|c|c|} \hline Q_{S} & P & Q_{d} \\ \hline 60 & \$ 5 & 10 \\ \hline 40 & 4 & 20 \\ \hline 30 & 3 & 30 \\ \hline 20 & 2 & 40 \\ \hline 10 & 1 & 50 \\ \hline \end{array} \end{array}$ $\begin{array}{l} \text { Domestic Market For Steel, Beta }\\ \begin{array}{|c|c|c|} \hline Q_{S} & P & Q_{d} \\ \hline 80 & \$ 5 & 20 \\ \hline 70 & 4 & 30 \\ \hline 60 & 3 & 40 \\ \hline 50 & 2 & 50 \\ \hline 40 & 1 & 60 \\ \hline \end{array} \end{array}$ The accompanying tables show data for the hypothetical nations of Alpha and Beta. $ Q_{S} $ is domestic quantity supplied, and $ Q_{d} $ is domestic quantity demanded. Assuming that Alpha and Beta are the only two nations in the world, the equilibrium world price must be lower than $ \$ 4 $ because, at $ \$ 4 $,

A) both nations will export steel. B) both nations will import steel. C) Alpha will export steel and Beta will import steel. D) Beta will export steel and Alpha will import steel. A) both nations will export steel. B) both nations will import steel. C) Alpha will export steel and Beta will import steel. D) Beta will export steel and Alpha will import steel.

\[\begin{array} { | l | c | c | } \hline & \text { Machines } & \text { Wine } \\ \hline \text { France } & 3 & 1 \\ \hline \text { Germany } & 1 & 1 \\ \hline \end{array}\] The accompanying table shows the output (either machines or wine) that each unit of input in France and Germany can produce. We see that

A) France has a comparative advantage in producing wine. B) Germany has a comparative advantage in producing wine. C) neither country has a comparative advantage in producing wine. D) Germany can produce machines at a lower opportunity cost than France. A) France has a comparative advantage in producing wine. B) Germany has a comparative advantage in producing wine. C) neither country has a comparative advantage in producing wine. D) Germany can produce machines at a lower opportunity cost than France.