Alpha Can Produce Either 18 Oranges or 9 Apples an Hour

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. Which of the following statements is true?

A) Alpha should export to Beta, but Beta should not export to Alpha.
B) Since Alpha has an absolute advantage in both goods, no mutual gains from trade are possible.
C) If Alpha specializes in growing oranges and Beta specializes in growing apples, they could both gain by specialization and trade.
D) If Alpha specializes in growing apples and Beta specializes in growing oranges, they could both gain by specialization and trade.

Correct Answer:

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