The table given below shows the number of labor hours required to produce 1 gallon of wine and 1 pound of cheese in the U.S. and France. The opportunity cost of producing cheese the United States is _____. \[\begin{array} { l c c } \hline \text { Labor hours to make: } & \text { In the United States } & \text { In France } \\ \hline \text { 1 gallon of wine } & 4.00 & 1.00 \\ \text { 1 pourd of cheese } & 1.00 & 2.00 \\ \hline \end{array}\]

A) 1 gallon of wine B) 4 gallons of wine C) 0.25 gallons of wine D) 0.5 gallons of wine A) 1 gallon of wine B) 4 gallons of wine C) 0.25 gallons of wine D) 0.5 gallons of wine C

The table given below shows the number of labor hours required to produce 1 gallon of wine and 1 pound of cheese in the U.S. and France. The United States has an absolute advantage in the production of _____. \[\begin{array} { l c c } \hline \text { Labor hours to make: } & \text { In the United States } & \text { In France } \\ \hline \text { 1 gallon of wine } & 4.00 & 1.00 \\ \text { 1 pourd of cheese } & 1.00 & 2.00 \\ \hline \end{array}\]

A) neither wine nor cheese B) only wine C) both wine and cheese D) only cheese A) neither wine nor cheese B) only wine C) both wine and cheese D) only cheese D

The table given below shows the number of labor hours required to produce 1 gallon of wine and 1 pound of cheese in the U.S. and France. The United States has a comparative advantage in the production of _____. \[\begin{array} { l c c } \hline \text { Labor hours to make: } & \text { In the United States } & \text { In France } \\ \hline \text { 1 gallon of wine } & 4.00 & 1.00 \\ \text { 1 pourd of cheese } & 1.00 & 2.00 \\ \hline \end{array}\]

A) both the goods B) only cheese C) only wine D) neither cheese nor wine A) both the goods B) only cheese C) only wine D) neither cheese nor wine

The table given below shows the number of umbrellas and bushels of corn produced in the United Kingdom and the Rest of the World per labor hour. The Rest of the World has an absolute advantage in the production of _____. \[\begin{array} { l c c } \hline\text { Productivity } & \text { In the United Kingdorn } & \text { In the Rest of the World } \\ \hline \text { Umbrellas per labor hour } & 0.25 & 1 \\ \text { Bushels of corn per labor hour } & 0.5 & 0.67\\\hline \end{array}\]

A) both the goods B) neither corn nor umbrella C) only umbrella D) only corn A) both the goods B) neither corn nor umbrella C) only umbrella D) only corn

The table given below shows the number of labor hours required to produce 1 umbrella and 1 bushel of corn in the U.K. and the Rest of the World. Calculate the opportunity cost of producing an umbrella in the Rest of the World. \[\begin{array} { | c | c | c | } \hline \text { Labor hours to make: } & \text { In the Urited Kingdorn } & \text { In the Rest of the World } \\ \hline \text { l umbrella } & 3.00 & 2.00 \\ \hline \text { 1 bushel of corn} & 1.00 & 0.25 \\ \hline \end{array}\]

A) 1/8 of a bushel of corn B) 1/3 of a bushel of corn C) 3 bushels of corn D) 8 bushels of corn A) 1/8 of a bushel of corn B) 1/3 of a bushel of corn C) 3 bushels of corn D) 8 bushels of corn

The table given below shows the number of umbrellas and bushels of corn produced in the United Kingdom and the Rest of the World per labor hour. The opportunity cost of producing an umbrella in the United Kingdom is _____. \[\begin{array} { l c c } \hline\text { Productivity } & \text { In the United Kingdorn } & \text { In the Rest of the World } \\ \hline \text { Umbrellas per labor hour } & 0.25 & 1 \\ \text { Bushels of corn per labor hour } & 0.5 & 0.67\\\hline \end{array}\]

A) 2 bushels of corn B) 3 bushels of corn C) 3/2 of a bushel of corn D) 1/3 of a bushel of corn A) 2 bushels of corn B) 3 bushels of corn C) 3/2 of a bushel of corn D) 1/3 of a bushel of corn

Exam 3: Why Everybody Trades: Comparative Advantage

The table given below shows the number of labor hours required to produce 1 gallon of wine and 1 pound of cheese in the U.S. and France. If the U.S. and France engage in free trade with each other, the international price of cheese will lie between _ and _. Labor hours to make: In the United States In France 1 gallon of wine 4.00 1.00 1 pourd of cheese 1.00 2.00

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

C

The table given below shows the number of labor hours required to produce 1 gallon of wine and 1 pound of cheese in the U.S. and France. The opportunity cost of producing cheese the United States is _____. Labor hours to make: In the United States In France 1 gallon of wine 4.00 1.00 1 pourd of cheese 1.00 2.00

Free

(Multiple Choice)

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(46)

Question 2

Correct Answer:

Verified

C

The table given below shows the number of labor hours required to produce 1 gallon of wine and 1 pound of cheese in the U.S. and France. The United States has an absolute advantage in the production of _____. Labor hours to make: In the United States In France 1 gallon of wine 4.00 1.00 1 pourd of cheese 1.00 2.00

Free

(Multiple Choice)

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(38)

Question 3

Correct Answer:

Verified

D

A bottle of wine can be produced in France with 2 labor hours, and in the United States with 4 labor hours. A pound of beef can be produced in France with 1 labor hour, and in the United States with ½ labor hours. Which of the following is true in this context?

(Multiple Choice)

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Question 4

The opportunity cost of producing a good is the additional labor cost incurred to produce an extra unit of the good.

(True/False)

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Question 5

Briefly discuss the primary features of the mercantilist philosophy. Mention any two major criticisms of the mercantilist theory as put forward by Adam Smith and other economists.

(Essay)

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Question 6

The table given below shows the number of labor hours required to produce 1 gallon of wine and 1 pound of cheese in the U.S. and France. The United States has a comparative advantage in the production of _____. Labor hours to make: In the United States In France 1 gallon of wine 4.00 1.00 1 pourd of cheese 1.00 2.00

(Multiple Choice)

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Question 7

With the help of a suitable diagram, explain how in a two-country two commodity model, one of the countries may fail to specialize completely despite enjoying comparative advantage in one of the goods.

(Essay)

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Question 8

The table given below shows the number of umbrellas and bushels of corn produced in the United Kingdom and the Rest of the World per labor hour. The Rest of the World has an absolute advantage in the production of _____. Productivity In the United Kingdorn In the Rest of the World Umbrellas per labor hour 0.25 1 Bushels of corn per labor hour 0.5 0.67

(Multiple Choice)

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Question 9

Explain how a mutually beneficial trade is possible in a two-country two-good model even when one of the countries has absolute advantage in the production of both the commodities.

(Essay)

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Question 10

The theory of comparative advantage was proposed by:

(Multiple Choice)

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Question 11

The table given below shows the number of labor hours required to produce 1 umbrella and 1 bushel of corn in the U.K. and the Rest of the World. Calculate the opportunity cost of producing an umbrella in the Rest of the World. Labor hours to make: In the Urited Kingdorn In the Rest of the World l umbrella 3.00 2.00 1 bushel of corn 1.00 0.25

(Multiple Choice)

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Question 12

The act of buying at a low price in one place and selling at a high price in another place is called relative pricing.

(True/False)

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Question 13

Adam Smith's theory of absolute advantage is based on the labor theory of value.

(True/False)

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Question 14

The table given below shows the number of umbrellas and bushels of corn produced in the United Kingdom and the Rest of the World per labor hour. The opportunity cost of producing an umbrella in the United Kingdom is _____. Productivity In the United Kingdorn In the Rest of the World Umbrellas per labor hour 0.25 1 Bushels of corn per labor hour 0.5 0.67

(Multiple Choice)

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Question 15

Vintland and Moonited Republic produce wine and cheese. The opportunity cost for the production of a bottle of wine in Vintland is 2 pounds of cheese, and in the Moonited Republic is 2.5 pounds of cheese. Based on this information, it can be concluded that:

(Multiple Choice)

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Question 16

Explain how products produced by high-wage workers in the United States can compete with the products manufactured in countries whose workers earn much lower wages.

(Essay)

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Question 17

Consider a two-country, two-commodity model. The table given below shows the units of good X and good Y produced in country A and country B per labor hour. If country A transfers 1 labor hour from the production of good Y to the production of good X, total world production of good X will _ by _ units. Productivity Country A Courntry B Good X 1.00 0.50 Good Y 0.20 0.70

(Multiple Choice)

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Question 18

In a two-country two-commodity model, if a country has higher labor productivity in producing both the goods, it must produce and export both the goods to the other country.

(True/False)

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Question 19

Mercantilists believed that a country gains from international trade only at the expense of another country or countries.

(True/False)

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Question 20

A bottle of wine can be produced in France with 2 labor hours, and in the United States with 4 labor hours. A pound of beef can be produced in France with 1 labor hour, and in the United States with ½ labor hours. Which of the following is true in this context?

The opportunity cost of producing a good is the additional labor cost incurred to produce an extra unit of the good.

Briefly discuss the primary features of the mercantilist philosophy. Mention any two major criticisms of the mercantilist theory as put forward by Adam Smith and other economists.

With the help of a suitable diagram, explain how in a two-country two commodity model, one of the countries may fail to specialize completely despite enjoying comparative advantage in one of the goods.

Explain how a mutually beneficial trade is possible in a two-country two-good model even when one of the countries has absolute advantage in the production of both the commodities.

The theory of comparative advantage was proposed by:

The act of buying at a low price in one place and selling at a high price in another place is called relative pricing.

Adam Smith's theory of absolute advantage is based on the labor theory of value.

Vintland and Moonited Republic produce wine and cheese. The opportunity cost for the production of a bottle of wine in Vintland is 2 pounds of cheese, and in the Moonited Republic is 2.5 pounds of cheese. Based on this information, it can be concluded that:

Explain how products produced by high-wage workers in the United States can compete with the products manufactured in countries whose workers earn much lower wages.

In a two-country two-commodity model, if a country has higher labor productivity in producing both the goods, it must produce and export both the goods to the other country.

Mercantilists believed that a country gains from international trade only at the expense of another country or countries.

International Economics Is Different

The Basic Theory Using Demand and Supply

Trade: Factor Availability and Factor Proportions Are Key

Who Gains and Who Loses From Trade

Scale Economies, Imperfect Competition, and Trade

Growth and Trade Part II: Trade Policy

Analysis of a Tariff

Nontariff Barriers to Imports

Arguments for and Against Protection

Pushing Exports

Trade Blocs and Trade Blocks

Trade and the Environment

Trade Policies for Developing Countries

Multinationals and Migration: International Factor Movements

Payments Among Nations

The Foreign Exchange Market

Forward Exchange and International Financial Investment

What Determines Exchange Rates

Government Policies Toward the Foreign Exchange Market

International Lending and Financial Crises

How Does the Open Macroeconomy Work

Internal and External Balance With Fixed Exchange Rates

Floating Exchange Rates and Internal Balance

National and Global Choices: Floating Rates and the Alternatives

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