Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. They can each produce any linear combination as well. Free trade between these two countries will take place
A) as long as Canada is willing to give up 0.25 unit of clothing to get a unit of food.
B) as long as USA asks for at least 1.5 units of clothing in exchange for a unit of food.
C) as long as Canada asks for at least 3 units of food in exchange for a unit of clothing.
D) as long as USA is willing to give up at least 1.5 units of food in exchange for a unit of clothing.
D
You might also like to view...
The wages for Nike workers increases. At the same time, we see the price for Adidas shoes increase. How does this affect the market for Nike shoes?
a. The demand curve will shift to the left; the supply curve will shift to the left b. The demand curve will shift to the left; the supply curve will shift to the right c. The demand curve will shift to the right; the supply curve will shift to the left d. The demand curve will shift to the right; the supply curve will shift to the right
When a worker specializes in one task, he focuses on that one function in the production process, ignoring the whole system. This is likely to
A. increase the cross-training costs. B. result in functional myopia that reduces overall productivity. C. eliminate trade-offs since only one task is undertaken by each employee. D. lead to greater complementarity between one task and another.
According to the Keynesian view of aggregate supply, an increase in the money supply will:
A. Always cause inflation. B. Cause inflation if the economy is at full employment. C. Cause inflation only if aggregate supply is horizontal. D. Never cause inflation.
A decrease in supply will increase prices most when demand is
A. perfectly inelastic. B. unit elastic. C. inelastic (but not perfectly inelastic). D. elastic.