In the figure below, AB is the production-possibility curve of Canada. The line PQ shows the price ratio of one bushel of wheat/bale of cotton. I1 and I2 are two of the community indifference curves of Canada. With free trade, Canada can achieve a level of well-being corresponding to I2. In the absence of international trade, one bushel of wheat will exchange for ________ bale(s) of cotton in Canada. After Canada engages in international trade, one bushel of wheat will exchange for ________ bale(s) of cotton.
A. 65, 85
B. four; one
C. one; 0.25
D. one; four
Answer: D
You might also like to view...
Suppose that accountants increase the price for calculating income taxes owed by 20 percent. The short-run demand for their service is less elastic than the long-run demand because in the long run consumers will ________
A) spend less on this service B) experience an increase in income C) try to avoid paying their income tax D) find other ways to calculate the income tax they must pay
The idea that investors today compare the returns on bonds with differing times to maturity to see which is expected to give them the highest return is the underlying principle behind the ________ of the term structure of interest rates
A) expectations theory B) investors' viewpoint analysis C) segmented-markets theory D) yield comparison theory
When oligopolistic companies engage in collusion, the companies are involved in a
A) noncooperative game. B) negative-sum game. C) competitive game. D) cooperative game.
Aggregate supply (AS) refers to:
a. the total quantity of inputs that firms will request and purchase. b. the total quantity of output that firms will produce and sell. c. the smallest quantity of output that firms will produce and destroy. d. the total quantity of inputs that firms will request and waste.