There is no way that externalities can be corrected.

Suppose that Canada can produce 15 timber or 3 film and Mexico can produce 9 timber or 3 film. Suppose that opportunity costs are constant. Which of the following is FALSE?

A) Canada has an absolute advantage in timber production. B) Mexico has a comparative advantage in film production. C) The opportunity costs for producing timber are lower in Canada than in Mexico. D) Canada and Mexico would find trade mutually advantageous at a ratio of one unit of film to six units of timber.

An import quota on a product normally does all of the following except

a. reduces the volume of that product traded. b. raises the price in the importing country. c. increases the price everywhere. d. reduces the price in the exporting country.