Suppose There Are Only Two Goods in the World,wheat and Shoes.If

question 10

Multiple Choice

Suppose there are only two goods in the world,wheat and shoes.If it is true that with its vast resources the United States could produce both more wheat and more shoes than Brazil,

• A)Brazil will never have a comparative advantage and,thus,can never gain from trading with the United States.
• B)trade between the United States and Brazil will make the United States better off but will leave Brazil worse off unless the wage of workers in Brazil rises to equal that of American workers.
• C)total production of wheat and shoes cannot be increased through specialization and trade.
• D)both countries will be able to gain from specialization and trade as long as relative costs of producing the two goods are different in Brazil than in the United States.

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Definitions:

Lactate

A compound produced during anaerobic metabolism, often associated with muscle fatigue.

Liver

A large, vital organ in vertebrates responsible for detoxification, producing bile, metabolizing nutrients, and performing other biochemical tasks.

Glucose

A simple sugar that is an important energy source in living organisms, also a critical component of carbohydrate metabolism.

Cori Cycle

Named for Czech-U.S. biochemist and Nobel laureate Carl F. Cori (1896–1984). Lactic acid, produced by skeletal muscle, is carried in the blood to the liver, where it is aerobically converted into glucose. The glucose may return through the blood to skeletal muscle or may be stored as glycogen in the liver.