Suppose Mexico has a comparative advantage relative to the United States in the manufacture of clothing and the United States has a comparative advantage in producing agricultural products. Which of the following is most likely to occur?
A) Mexico and the United States will not trade agricultural products or clothing.
B) Mexico will sell clothing to the United States and the United States will sell agricultural products to Mexico.
C) Mexico will sell agricultural products to the United States and Mexico will buy clothing from the United States.
D) Mexico will sell clothing to the United States but not buy any agricultural products from the United States.
B
You might also like to view...
Liabilities are:
A. saving minus investment. B. anything of value one owns. C. the debts one owes. D. current income minus spending on current needs.
A tax on sellers and an increase in input prices affect the supply curve in the same way
a. True b. False Indicate whether the statement is true or false
Refer to the following figure. The price of capital is $50 per unit:
How many units of labor should the firm use to produce 1,200 units of output at least cost?
A. 500 B. 240 C. 175 D. 120 E. 128
Which of the following would shift the investment demand curve rightward?
a. Lower expected rates of return on investment in capital goods b. Greater inventories of capital goods c. Higher business taxes on capital goods d. A more rapid rate of technological progress