1. If the countries described in question #9 specialize in the goods for which they have a comparative advantage in, what is the total amount of wheat and corn they will have collectively?

a. 100 units of corn, 60 units of wheat

b. 100 units of corn, 25 units of wheat

c. 60 units of corn, 10 units of wheat

d. 25 units of corn, 60 units of wheat

e. 100 units of corn, 10 units of wheat

2. Assume two countries, Country A and Country B can produce only two products - wheat and corn.

If country A devotes all their resources to wheat they can produce 100 units per year, and if they devote all their resources to corn, they can produce 25 units per year.

If country B devotes all their resources to wheat they can produce 60 units per year, and if they devote all their resources to corn, they can produce 10 units per year.

Which of the following statements is true?

a. Country A has an absolute advantage in both goods.

b. Country B has an absolute advantage in both goods.

c. Country A has a comparative advantage in wheat.

d. Country B has a comparative advantage in wheat.

e. Both option (a) and option (d) are true.

3. Consider the market for kale. Assume the FDA releases a new study on the health benefits of eating kale, while at the same time the cost of farm labor falls. What will the effect on equilbirium price and quantity. It may be helpful to draw a graph here showing supply and demand.

a. quantity falls and price rises

b. quantity rises and the effect on price is unknown

c. the effect on quantity is unknown and price falls

d. quantity rises and price rises

e. the effect on quantity is unknown and price rises

4.