1. One important gain to trade is access to global markets. That’s likely to be important if ______ a) U.S. wages are rising. b) the United States is growing faster than other countries. c) other...

1. One important gain to trade is access to global markets. That’s likely to be important if ______ a) U.S. wages are rising. b) the United States is growing faster than other countries. c) other countries are growing faster than the United States. d) wages in other countries are falling.

2. Suppose that because of climate or some other reason, Country A’s wheat farmers have higher productivity than Country B’s wheat farmers. That is, on the same size farm, Country A can grow twice as much wheat as Country B with the same amount of labor. a) Is this an example of absolute advantage or comparative advantage? Explain. b) Does this mean Country A will necessarily export wheat to Country B? Explain.