Suppose there are only two goods in the world, corn and shirts. If it is true that with its vast resources the United States could produce both more corn and more shirts than Mexico,

a. Mexico will never have a comparative advantage and, thus, can never gain from trading with the United States.
b. trade between the United States and Mexico will make the United States better off but will leave Mexico worse off unless the wage of workers in Mexico rises to equal that of American workers.
c. total production of corn and shirts cannot be increased through specialization and trade.
d. both countries will be able to gain from specialization and trade as long as relative costs of producing the two goods are different in Mexico than in the United States.

D

Economics

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A car that is produced in 2016 is not sold until 2017. According to the definition of GDP, in which year's GDP should it be counted?

A) Half of the sales price will count as part of 2016 GDP and half will count as part of 2017 GDP. B) The production cost will count as part of 2016 GDP while the sales price will count as part of 2017 GDP. C) 2017 D) 2016

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Please discuss the volume effect and the value effect in regards to how the current account will move given a change in the real exchange rate

What will be an ideal response?

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