The success of the gold standard in the period before World War I is attributed partly to the high degree of tranquility in global markets.

In the above figure, what happens to the firm's optimal level of output if the price it receives for its product increases from P2 to P3?

A) Output stays the same. B) Output decreases. C) Output increases. D) There is not enough information provided to know what happens to output.

Kelly and David are both capable of repairing cars and cooking meals. Which of the following scenarios is not possible?

a. Kelly has a comparative advantage in repairing cars and David has a comparative advantage in cooking meals. b. Kelly has an absolute advantage in repairing cars and David has an absolute advantage in cooking meals. c. Kelly has a comparative advantage in repairing cars and in cooking meals. d. David has an absolute advantage in repairing cars and in cooking meals.