Refer to Figure 22-4. Using the per-worker production function in the figure above, the largest changes in an economy's standard of living would be achieved by a movement from

The menu cost theory suggests that

A) wages and prices move freely and quickly. B) the economy is characterized only by perfect competition. C) there will be no unemployment. D) firms find frequent price changes to be costly.

According to the Ricardian model, the source of comparative advantage is:

a. differences in labor productivity in the different countries. b. differences in foreign trade policies followed by the governments of the various countries. c. differences in resource endowments of the economies. d. differences in the fields of research and development in the countries. e. differences in the taste and preferences of the consumers in the different countries.