When a Mexican resident buys a ukulele from a U.S. producer, there is a(n)
A) increase in the supply of dollars in the foreign exchange market.
B) decrease in the supply of dollars in the foreign exchange market.
C) increase in the demand for dollars in the foreign exchange market.
D) decrease in the demand for dollars in the foreign exchange market.
C
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In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage. One reasons for this is
A) some countries have more resources than other countries. B) production of most goods involves increasing opportunity costs. C) tastes for many traded goods are similar in many countries because of globalization. D) comparative advantage works better in theory than in practice.
In terms of the competing claims of equality and efficiency, in the United States we have
a. chosen greater wage inequality for lower unemployment. b. chosen higher unemployment for less wage inequality. c. both greater wage inequality and higher unemployment. d. not faced a trade-off between wage inequality and unemployment. e. been able to choose both less wage inequality and lower unemployment.