Economic profit is defined as the difference between revenue and ____

You are the Minister of Trade for a small island country with the following annual PPC:You are negotiating a trade agreement with a neighboring island with the following annual PPC: If you offer to give the other island 1 coconut for every 4 fish they give you, then they will:

A. refuse your offer because they have a comparative advantage in fish. B. accept your offer because their opportunity cost of a coconut is greater than 4 fish. C. accept your offer because your opportunity cost of a coconuts is less than 4 fish. D. refuse your offer because they can produce as many coconuts as you can.

You read that 40 firms that grow and export strawberries to the United States decide to form a cartel. The cartel aims to raise the price of strawberries and reduce output to increase profits for the strawberry growers. You predict that this cartel will probably

A. not be successful because it is difficult to export a perishable product like strawberries. B. be successful because enforcing the rules among only 40 firms is very manageable. C. not be successful because there are too many firms that are trying to organize the cartel and there are a number of good substitutes for strawberries. D. be successful because the demand for strawberries is very inelastic.