Based on Table 3.1, the pre-trade relative price of a computer in Mexico is
A) three pairs of shoes.
B) one pair of shoes.
C) one-half pair of shoes.
D) one-third pair of shoes.
A
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The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. There is no external benefit nor external cost. The demand curve for chocolate is the same as the
A) marginal social cost curve of chocolate. B) marginal social benefit curve of chocolate. C) opportunity cost curve of chocolate. D) marginal social benefit curve minus the marginal social cost curve of chocolate.
Suppose that you have wheat in storage and that the price of wheat is currently $7.00 per bushel. You can sell your wheat immediately but you also have an opportunity to sell in six months. At that time, you believe the price of wheat will be $8.00 per bushel. Your cost of storage is $0.75 per bushel for six months. One dollar in six months is worth one dollar today (no time preference). What strategy is profit maximizing?
A. Hold onto your wheat and sell in six months. B. Sell your wheat today. C. Minimize your losses by exiting the wheat market. D. Expand production to sell more wheat.