The graph above shows domestic supply and demand with trade. With trade, this country can purchase at the world price, Pw. Which of the following areas represents producer surplus with trade?

For each of the following transactions, explain what happens to the merchandise trade balance, current account balance, and financial account balance in both the United States and Mexico. The exchange rate is 2 Mexican pesos per U.S. dollar

(a) A Mexican firm spends 4 million pesos to buy radiology equipment from a U.S. firm. (b) A U.S. firm buys 20,000 sombreros at 20 pesos each. (c) Mexican computer firms send 200 programmers to universities in the United States, paying tuition and expenses of $3000 each. (d) A Mexican entrepreneur gives 50,000 pesos to the United Way of San Antonio, Texas. (e) Mexican investors buy $10 million worth of 30-year U.S. Treasury bonds.

At the point where total utility is at its peak, marginal utility is:

a. zero. b. positive. c. negative. d. positive, but declining. e. positive, but increasing.