Firms exist because of the low cost associated with creating complete contracts

Suppose the United States experiences a rise in the U.S. dollar price of foreign exchange.

A) This means that the U.S. exchange rate has risen and the U.S. dollar buys more foreign currency. B) This means that the U.S. exchange rate has risen and the U.S. dollar buys less foreign currency. C) This means that the U.S. exchange rate has fallen and the U.S. dollar buys more foreign currency. D) This means that the U.S. exchange rate has fallen and the U.S. dollar buys less foreign currency.

For each surfboard that Australia produces, it gives up the opportunity to make 25 boomerangs. New Zealand can produce 1 surfboard for every 15 boomerangs it produces

Which of the following is true about the comparative advantage between the two countries? A) Australia has the comparative advantage in producing surfboards. B) New Zealand has the comparative advantage in producing surfboards and boomerangs. C) Australia has the comparative advantage in producing boomerangs. D) New Zealand has the comparative advantage in producing boomerangs.