Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that
a. Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will export coffee.
b. Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will import coffee.
c. other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will export coffee.
d. other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will import coffee.
d
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If the economy has an MPC of 0.8, by how much will a $50 billion increase in government purchases increase GDP? By how much will a $50 billion increase in taxes decrease GDP?
What will be an ideal response?
There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand, we must
A) multiply the price times quantity for each buyer and then add the resulting products together. B) add the quantities that each buyer will purchase at every price. C) add the prices that each buyer will pay at every quantity. D) average the price each buyer is willing to pay for each given quantity. E) give up because there is no way to find the market demand.
When using rational expectations, forecast errors will, on average, be ________ and ________ be predicted ahead of time
A) positive; can B) positive; cannot C) negative; can D) zero; cannot
Economic models take into account the effect of trade on the distribution of income.
Answer the following statement true (T) or false (F)