Given the Following Classical-Type Table Showing the Fixed Money Prices

question 22

Multiple Choice

Given the following Classical-type table showing the fixed money prices of each good in each of the two countries:
$\begin{array} { l c c } & \underline{\text { Shoes } }&\underline{ \text { Wine} } \\\\\text { United States } & \text { \$20/pair } & \text { \$10/bottle } \\\text { Switzerland } & 100 \text { francs/pair } & 40 \text { francs/bottle }\end{array}$
If the exchange rate is flexible, the upper limit to the price of the dollar (i.e., the number of Swiss francs per dollar above which there is export of both goods by Switzerland) is

• A) 5 francs = $1.
• B) 4 francs = $1.
• C) 0.25 francs = $1.
• D) 0.20 francs = $1.

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Definitions:

Null Hypothesis

A default hypothesis that there is no effect or no difference, used as a starting point for statistical significance testing.

Analytical Comparisons

Comparisons between groups that are part of a larger research design.

Specific Hypothesis

A precise statement or prediction about the relationship between two or more variables that can be tested.

Analytic Comparisons

Comparisons made using systematic logical reasoning to explore differences or similarities between datasets or variables.