Based on Table 3.1,trade between the United States and Mexico will occur as long as the relative price of shoes is between
A)three computers and one computer.
B)three computers and two computers.
C)one-half computer and one-third computer.
D)six computers and three computers.

Question

Quizplus · Accepted Answer

According to Table 3.1, the relative price of shoes in the United States is 2 computers, and the relative price of shoes in Mexico is 3 computers. Therefore, trade between the two countries will occur as long as the relative price of shoes is between 1/2 computer (which is half of the U.S. price) and 1/3 computer (which is 1/3 of the Mexican price). Choice C is the only option that falls within this range.