Exam 2: The Power of Trade and Comparative

Which of the following best explains the term "specialization" with respect to trade?

Trade allows countries to consume more than their ability to produce.

In 2010, Switzerland-based Nestlé began sailing supermarket barges up and down parts of the Amazon River. The barges carry approximately 300 different goods and cater to about a dozen local communities that fish the Amazon's bountiful rivers and whose members lack the time and money to visit a conventional store. Which advantage from trade is illustrated in this passage?

If instead of specialized doctors (neurologists, cardiologists, gastroenterologists, etc.) we had doctors who each knew the same things about all aspects of medicine, it would be:

The opportunity cost of producing a particular good refers to:

U.S. pharmaceutical companies sell drugs to Kenya, and Kenyan farmers sell flowers to the U.S. This pattern of trade suggests that the U.S. is the low-opportunity-cost producer of drugs and Kenya is the low-opportunity-cost producer of flowers.

Trade causes wages in countries with high productivity to increase and wages in countries with low productivity to decrease.

Facilitators of trade (such as Pierre Omidyar, the developer of eBay):

Conan O'Brien hosts the Conan show and Andy Richter, his sidekick, writes for it. Conan needs 4 hours to rehearse and host a good show. It takes Andy 10 hours to do the same. Conan writes one usable joke in an hour, but Andy needs 2 hours to do the same. From these numbers, we infer that Conan has an absolute advantage in the production of:

Conan O'Brien hosts the Conan show and Andy Richter, his sidekick, writes for it. Conan needs 4 hours to rehearse and host a good show. It takes Andy 10 hours to do the same. Conan writes one usable joke in an hour, but Andy needs 2 hours to do the same. Andy's opportunity cost of writing a single usable joke is:

Use the following to answer questions: Table: Movies and Oil Movies/Year Barrels of Oil/Year (millions) Texas 75 50 California 60 30 New York 20 5 -(Table: Movies and Oil) According to the table, which state has the comparative advantage in movies?

Use the following to answer questions: Table: Production Possibilities for the United States and Mexico Corn (millions of tons) Potatoes (millions of tons) United States 50 10 Mexico 40 5 -(Table: Production Possibilities for the United States and Mexico) According to the table on production possibilities for the United States and Mexico, Mexico has an absolute advantage in ________ and a comparative advantage in _________.

Trade tends to:

The economist credited with saying, "It is the maxim of every prudent master of a family never to attempt to make at home what it will cost him more to make than to buy," is Adam Smith.

Trade creates value by moving goods from people that value them less to people that value them more.

Fourteenth-century potters in the Chinese city of Jingdezhen developed the technology to heat a kiln at 1,300 degrees Celsius and produce porcelain, or "china," which was particularly popular in Persia where the Koran forbade serving food on gold or silver and wealthy families were anxious for a legal way to impress their dinner guests. The potters also imported Persian cobalt to create the blue dye for the porcelain (local cobalt was not as bold in color). Which advantage(s) from trade is(are) illustrated in this passage?

Martha Stewart does not do her own ironing because she:

Adam Smith:

(Table: iPhone and iPod Production) According to the table on iPhone and iPod production, which of the following is TRUE about Canadian and U.S. comparative advantages?

Globalization is best described as: