Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that
a. Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will export coffee.
b. Guatemala has a comparative advantage over other countries in the production of coffee, and Guatemala will import coffee.
c. other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will export coffee.
d. other countries have a comparative advantage over Guatemala in the production of coffee, and Guatemala will import coffee.
d
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A worker supplies labor to the market if the
A) wage is less than the reservation wage. B) wage is greater than the reservation wage. C) minimum wage is less than the reservation wage. D) demand for labor exceeds the supply of labor.
When demand is elastic, the marginal revenue resulting from a decrease in price is:
A) positive. B) zero. C) negative. D) cannot be determined without more information.