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Essentials of Economics 7th Edition by Gregory Mankiw
Edition 7ISBN: 978-1285165950Essentials of Economics 7th Edition by Gregory Mankiw
Edition 7ISBN: 978-1285165950 Exercise 5
When the nation of Ectenia opens itself to world trade in coffee beans, the domestic price of coffee beans falls. Which of the following describes the situation?
A) Domestic production of coffee rises, and Ectenia becomes a coffee importer.
B) Domestic production of coffee rises, and Ectenia becomes a coffee exporter.
C) Domestic production of coffee falls, and Ectenia becomes a coffee importer.
D) Domestic production of coffee falls, and Ectenia becomes a coffee exporter.
A) Domestic production of coffee rises, and Ectenia becomes a coffee importer.
B) Domestic production of coffee rises, and Ectenia becomes a coffee exporter.
C) Domestic production of coffee falls, and Ectenia becomes a coffee importer.
D) Domestic production of coffee falls, and Ectenia becomes a coffee exporter.
Explanation
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Comparative advantage refers to the abil...
Essentials of Economics 7th Edition by Gregory Mankiw
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