Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:

Based on the data in Table 3.1, if Jesse and April choose to specialize and trade, then

A) April will specialize in painting snowboards and trade snowboards for kites. B) Jesse will specialize in painting snowboards and trade snowboards for kites. C) April will specialize in painting kites and trade kites for snowboards. D) None of the above; specialization and trade are not beneficial for Jesse and April.

Comparative advantage is based on

A) comparing physical endowments, such as mineral resources, of two countries. B) differences in opportunity costs between two countries. C) one country being able to outproduce another country in some good. D) comparing the capital accumulation of two countries. E) two countries producing the same good.