In the spring of 1994, Northwest Airlines took the independent action of reducing fares on its flights. Other competing airlines quickly matched the fare cuts. These actions might be interpreted as:

The textbook authors claim

A) diabetics don't need insulin. B) diabetics don't want insulin. C) diabetics face no substitutes for insulin. D) diabetics can't find insulin at a fair price. E) none of the above.

Suppose the United States can produce either 1 ton of potato or 0.5 tons of wheat per worker per year, while Ireland can produce either 3 tons of potatoes or 2 tons of wheat per worker per year. There can be mutual gains from trade if: a. the United States specializes in potatoes because of its comparative advantage in producing potatoes

b. the United States specializes in wheat production because of its absolute advantage in producing wheat. c. the United States specializes in wheat production because of its comparative advantage in producing wheat. d. the United States specializes in potatoes because of its absolute advantage in producing potatoes.