If one producer has the absolute advantage in the production of all goods, then that same producer will have the comparative advantage in the production of all goods as well

Figure 4.3 illustrates the demand for tacos. Assume that tacos and beer are complements. A decrease in the price of beer would bring about a movement from

A) point a to point c. B) point c to point a. C) D2 to D0. D) D0 to D2.

Answer the following statement(s) true (T) or false (F)

1. All cost increases are passed on to a firm's customers in the form of higher prices. 2. Higher fixed costs may cause a firm to shut down its operations but will not otherwise affect its production and pricing decisions. 3. Either a rise in marginal cost or a fall in marginal revenue could cause a firm to reduce its output. 4. Higher fuel costs would cause a delivery firm to raise the price it charges. 5. Higher insurance costs would cause a delivery firm to raise the price it charges.