Given the production possibility tables for First and Second Bakeries shown, we can determine that:First BakerySecond BakeryCookiesPiesCookiesPies018091012306206603300900
A. Second Bakery has a comparative advantage in the production of pies.
B. First Bakery has a comparative advantage in the production of pies.
C. First Bakery has a comparative advantage in the production of both goods.
D. neither bakery has a comparative advantage.
Answer: B
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A problem with the operation of the gold standard in the world economy was that
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