Assume that U.S. producers can manufacture cookies at a lower opportunity cost than Mexican producers. If this is the case
A. Mexico would have the comparative advantage in all products compared to the United States.
B. Mexico could still have the comparative advantage in cookie production.
C. it would still be possible for Mexico to have a comparative advantage in trade for some other products.
D. it will not be possible for Mexico to have an comparative advantage in the production of any other products.
Answer: C
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Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and B) and two pricing strategies (high and low). Which of the following is the outcome of the dominant strategy without cooperation?
A) Both firm A and firm B choose the high price. B) Both firm A and firm B choose the low price. C) Firm A chooses the low price while firm B chooses the high price. D) Firm A chooses the high price while firm B chooses the low price.