Refer to Table 16.1. Which of the following statements is correct?
A) There are potential gains from trade if: (1 ) Mexico specializes in the production of tomatoes, (2 ) Guatemala specializes in the production of beer, and (3 ) Mexico trades tomatoes to Guatemala for beer.
B) There are potential gains from trade if: (1 ) Mexico specializes in the production of beer, (2 ) Guatemala specializes in the production of tomatoes, and (3 ) Mexico trades beer to Guatemala for tomatoes.
C) There are no potential gains from trade because Mexico has an absolute advantage in the production of beer and tomatoes.
D) There are no potential gains from trade because Guatemala has an absolute advantage in the production of beer and tomatoes.
A
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For prices above the minimum average variable cost, a perfectly competitive firm's supply curve is
A) horizontal at the market price. B) vertical at zero output. C) the same as its marginal cost curve. D) the same as its average variable cost curve.
The value (purchasing power) of each unit of money
a. is largely independent of the money supply. b. tends to increase as the money supply expands. c. increases as prices rise. d. tends to decline as the money supply expands in relation to the availability of goods and services.