Suppose that the opportunity cost of producing a rocking chair in Mexico is 50 basketballs and the opportunity cost of a rocking chair in Japan is 80 basketballs. Japan and Mexico can realize mutual gains if the terms of trade are
a. greater than 80 basketballs per rocking chair, and Japan produces rocking chairs
b. between 50 and 80 basketballs per rocking chair, and Japan produces basketballs
c. greater than 80 basketballs per rocking chair, and Mexico produces basketballs
d. less than 50 basketballs per rocking chair, and Japan produces basketballs
e. between 50 and 80 basketballs per rocking chair, and Japan produces rocking chairs
B
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Unemployment normally arises when:
A) labor markets are frictionless. B) wages are above the market clearing wage level. C) wages are below the market clearing wage level. D) wages are equal to market clearing wage level.
Pessimists among the classical economists were least able to foresee the continual advancement in
a. managerial techniques b. technology c. birth control methods d. geographic discovery e. all of the above