Figure 34-2
?
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
You might also like to view...
In the above figure, the economy is at point A when changes occur. If the new equilibrium has a price level of 100 and real GDP of $17.0 trillion, then it must be the case that
A) aggregate demand has decreased. B) aggregate supply has decreased. C) aggregate demand has increased. D) aggregate supply has increased.
If a forecast is made using all available information, then economists say that the expectation formation is
A) rational. B) irrational. C) adaptive. D) reasonable.
All of the following will decrease the demand for labor by firms in an industry except
A. a decrease in the prices of inputs that complement labor. B. a decrease in the demand for the product produced by the industry. C. a decrease in the price of the product produced by the industry. D. a decrease in the prices of inputs that substitute for labor.
An asset is best able to serve as a medium of exchange if it is:
A. nonliquid. B. a store of value. C. liquid. D. not a store of value.