Figure 34-2
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In Figure 34-2, if the United States and Mexico are negotiating to trade wheat for petroleum,
A. the United States must receive more than 1 2/3 units of petroleum for a unit of wheat.
B. Mexico must receive more than 1 2/3 units of petroleum for a unit of wheat.
C. the limits of the agreement are between 1 unit of wheat for 2/3 unit of petroleum for the United States and 1 unit of wheat for 1 1/2 units of petroleum for Mexico.
D. if the agreement is formalized at 1 unit of wheat for 1 unit of petroleum, then Mexico will benefit from the trade but the United States will not.
Answer: C
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