Country A needs one input to produce an iced capp and two inputs to produce a doughnut. Country B needs two inputs to produce an iced capp and three inputs to produce a doughnut. Which of the following statements is incorrect.

a.Country B has a comparative advantage in doughnuts.

b.Country A has a comparative advantage in doughnuts.

c.Country A has a comparative advantage in iced capps.

d.Country A has an absolute advantage in doughnuts.

Demand shifts to the right proportionately more than supply shifts to the left. As a result, the equilibrium price increases and...

a.The equilibrium quantity decreases.

b.The equilibrium quantity increases.

c.The effect on the equilibrium quantity is ambiguous.

d.The equilibrium quantity remains unchanged

Domestic demand is given by P = 100 - 2Q and domestic supply is given by P = 10 + 3Q. If the world price is 40 and the country imposes a tariff of 6 per unit, then it will generate tariff revenue of...

a.90.

b.240.

c.120.

d.108