Related to the Economics in Practice on page 155: Suppose you own a truck and use it to deliver merchandise to retailers and hire a driver to make such deliveries. At higher rates of speed the truck gets fewer miles per gallon of gas. Holding all else constant, as the price of gasoline continues to rise
A. you will ask your driver to change their driving in any way.
B. you will instruct your driver to drive faster.
C. you will make more deliveries to cover the increasing cost of fuel.
D. you will instruct your driver to drive slower.
Answer: D
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When production costs go_________________, the producer is usually able to produce more goods and services at each and every price in the market.
Fill in the blank(s) with the appropriate word(s).
Suppose that Canada can produce 15 units of timber or 3 units of grain. Suppose that Mexico can produce 6 units of timber or 2 units of grain. Which of the following is CORRECT?
A) Mexico has a comparative advantage in grain production. B) Mexico has an absolute advantage in timber production. C) Canada has a comparative advantage in grain production. D) The countries would find trade mutually beneficial at a trading ratio of 1 grain for 2 timber.