The price of trade Suppose that Greece and Sweden both produce jeans and olives. Greece's opportunity cost of producing a crate of olives is 5 pairs of jeans while Sweden's opportunity cost of producing a crate of olives is 10 pairs of jeans. By comparing the opportunity cost of producing olives in the two countries, you can tell that has a comparative advantage in the production of olives and has a comparative advantage in the production of jeans. Suppose that Greece and Sweden consider trading olives and jeans with each other. Greece can gain from specialization and trade as long as it receives more than of jeans for each crate of olives it exports to Sweden. Similarly, Sweden can gain from trade as long as it receives more than of olives for each pair of jeans it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of olives in terms of jeans) would allow both Sweden and Greece to gain from trade?a. 9 pairs of jeans per crate of olives b. 6 pairs of jeans per crate of olives c. 2 pairs of jeans per crate of olives d. 1 pair of jeans per crate of olive

Suppose that fizzo and pop hop are the only two firms that sell orange soda. the following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: pop hopadvertise doesn’t advertisefizzo advertise 10, 10 18, 2doesn’t advertise 2, 18 11, 11for example, the upper right cell shows that if fizzo advertises and pop hop doesn't advertise, fizzo will make a profit of $18 million, and pop hop will make a profit of $2 million. assume this is a simultaneous game and that fizzo and pop hop are both profit-maximizing firms.if fizzo decides to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise.if fizzo decides not to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise.if pop hop advertises, fizzo makes a higher profit if it chooses (not to advertise, to .if pop hop doesn't advertise, fizzo makes a higher profit if it chooses (not to advertise, to . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? fizzo will choose to advertise and pop hop will choose not to advertise.both firms will choose to advertise.fizzo will choose not to advertise and pop hop will choose to advertise.both firms will choose not to advertise.again, suppose that both firms start off not advertising. if the firms decide to collude, what strategies will they end up choosing? fizzo will choose not to advertise and pop hop will choose to advertise.both firms will choose not to advertise.fizzo will choose to advertise and pop hop will choose not to advertise.both firms will choose to advertise.