Using the data in the above table and assuming constant opportunity costs, it is correct to state that
A) the United States has a comparative advantage in producing cloth.
B) Mexico has an absolute advantage in producing both food and cloth.
C) the United States has a comparative advantage in producing both food and cloth.
D) Mexico has a comparative advantage in producing cloth.
A
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In 1985, Alice paid $20,000 for an option to purchase ten acres of land. By paying the $20,000, she bought the right to buy the land for $100,000 in 1992. When she acquired the option in 1985, the land was worth $120,000
In 1992, it is worth $110,000. Should Alice exercise the option and pay $100,000 for the land? A) Yes. B) No. C) It depends on what the rate of inflation was between 1985 and 1992. D) It depends on what the rate of interest was.
When Fred's income was $100 per week, 10 units of good X were demanded. Now his income is $150 per week and 12 units of good X are demanded. Using the percentage change formula, the income elasticity of demand for good X equals
A) 0.45. B) 0.40. C) 2.20. D) 2.50.
Who is likely to be in favor of a country that would be a net-importer if it moved from autarky to free trade?
A. Domestic producers B. Domestic consumers C. Foreign consumers D. Foreign governments.