Question: 1.12. Do you agree or disagree with each of the following statements? Explain. a. If it is possible to exchange 3 pounds of cheese for

1.12. Do you agree or disagree with each of the following statements? Explain.

a. If it is possible to exchange 3 pounds of cheese for 2 bottles of wine, then the price of cheese is 2/3 the price of wine.

b. A country can only gain from trade if it can produce a good at a lower absolute cost than its trading partner.

c. If there are constant marginal and average costs of production, then it is in a country’s best interest to specialize completely in the production of some goods but to import others.

d. Assuming that labor is the only input, if the opportunity cost of producing a yard of cloth is 3 bushels of wheat per yard, then wheat must require 3 times as much labor per unit produced as cloth.

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