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. Which of the following statements is true? \[\begin{array} { | c | c | c | } \hline \text { Labor hours to make: } & \text { In the Urited Kingdorn } & \text { In the Rest of the World } \\ \hline \text { l umbrella } & 3.00 & 2.00 \\ \hline \text { 1 bushel of corn} & 1.00 & 0.25 \\ \hline \end{array}\]

A) The United Kingdom has a comparative advantage in the production of corn. B) The United Kingdom has an absolute advantage in the production of umbrellas. C) The United Kingdom has a comparative advantage in the production of umbrellas. D) The United Kingdom has a comparative advantage in the production of both the goods. A) The United Kingdom has a comparative advantage in the production of corn. B) The United Kingdom has an absolute advantage in the production of umbrellas. C) The United Kingdom has a comparative advantage in the production of umbrellas. D) The United Kingdom has a comparative advantage in the production of both the goods.

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. The Rest of the World has an absolute advantage in the production of _____. \[\begin{array} { | c | c | c | } \hline \text { Labor hours to make: } & \text { In the Urited Kingdorn } & \text { In the Rest of the World } \\ \hline \text { l umbrella } & 3.00 & 2.00 \\ \hline \text { 1 bushel of corn} & 1.00 & 0.25 \\ \hline \end{array}\]

A) both corn and umbrella B) only umbrella C) only corn D) neither corn nor umbrella A) both corn and umbrella B) only umbrella C) only corn D) neither corn nor umbrella

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. What is the opportunity cost of producing a bushel of corn in the United Kingdom? \[\begin{array} { | c | c | c | } \hline \text { Labor hours to make: } & \text { In the Urited Kingdorn } & \text { In the Rest of the World } \\ \hline \text { l umbrella } & 3.00 & 2.00 \\ \hline \text { 1 bushel of corn} & 1.00 & 0.25 \\ \hline \end{array}\]

A) 1/8 of an umbrella B) 1/3 of an umbrella C) 3 umbrellas D) 8 umbrellas A) 1/8 of an umbrella B) 1/3 of an umbrella C) 3 umbrellas D) 8 umbrellas

Exam 3: Why Everybody Trades: Comparative Advantage

Arbitrage is the act of buying at one place and selling at another place in order to profit from the price differences that exist between the two places.

(True/False)

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Question 21

The figure given below shows the production possibility curves for Canada (AB) and the Rest of the World (CD). The opportunity cost of producing a bushel of corn in Canada and in the Rest of the World are _ liters and _ liters of maple syrup respectively.

(Multiple Choice)

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Question 22

If country X has a higher labor productivity than the rest of the world in the production of a good, then country X has a comparative advantage in the production of the good.

(True/False)

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Question 23

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. Which of the following statements is true? Productivity Country A Country B Good X 1.00 0.50 Good Y 0.20 0.70

(Multiple Choice)

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Question 24

Which of the following is NOT true of a nation's production-possibility curve?

(Multiple Choice)

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Question 25

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 wine 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

(Multiple Choice)

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Question 26

If a country exports the good that it can produce at a low opportunity cost and imports those goods that it would otherwise produce at a high opportunity cost, we say that such trade is based on:

(Multiple Choice)

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Question 27

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. If the U.K. and the Rest of the World begin to trade with each other, the international price of corn will lie between _ and _. 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 28

Using relevant diagrams, illustrate a two-country two-good model in which one country has an absolute advantage in the production of both goods, but each has a comparative advantage in the production of only one good.

(Essay)

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Question 29

Which of the following is true of mercantilism?

(Multiple Choice)

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Question 30

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. Which of the following statements is true? 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 31

In the two-country two-good model, both countries can gain from trade as long as their relative advantages and disadvantages in producing different goods are different.

(True/False)

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Question 32

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. The number of labor hours required to produce 1 unit of good X in country A is: Productivity Country A Country B Good X 1.00 0.50 Good Y 0.20 0.70

(Multiple Choice)

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Question 33

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. The Rest of the World has an absolute advantage in the production of _____. 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 34

Which of the following is true of a constant cost production-possibility curve?

(Multiple Choice)

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Question 35

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. What is the opportunity cost of producing a bushel of corn in the United Kingdom? 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 36

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 B transfers 1 labor hour from the production of good X to the production of good Y, total world production of good Y 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 37

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. What is the relative price of cheese (the price of cheese in terms of wine) in France under no trade situation? 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 38

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. If the U.K. and the Rest of the World begin to trade with each other, the international price of umbrellas will lie between _ and _. 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 39

If a country does not have an absolute advantage in the production of at least one commodity, then it cannot gain from free trade.

(True/False)

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Question 40

Arbitrage is the act of buying at one place and selling at another place in order to profit from the price differences that exist between the two places.

The figure given below shows the production possibility curves for Canada (AB) and the Rest of the World (CD). The opportunity cost of producing a bushel of corn in Canada and in the Rest of the World are _ liters and _ liters of maple syrup respectively.

If country X has a higher labor productivity than the rest of the world in the production of a good, then country X has a comparative advantage in the production of the good.

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. Which of the following statements is true? Productivity Country A Country B Good X 1.00 0.50 Good Y 0.20 0.70

Which of the following is NOT true of a nation's production-possibility curve?

If a country exports the good that it can produce at a low opportunity cost and imports those goods that it would otherwise produce at a high opportunity cost, we say that such trade is based on:

Using relevant diagrams, illustrate a two-country two-good model in which one country has an absolute advantage in the production of both goods, but each has a comparative advantage in the production of only one good.

Which of the following is true of mercantilism?

In the two-country two-good model, both countries can gain from trade as long as their relative advantages and disadvantages in producing different goods are different.

Which of the following is true of a constant cost production-possibility curve?

If a country does not have an absolute advantage in the production of at least one commodity, then it cannot gain from free trade.

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

Filters

Exam 3: Why Everybody Trades: Comparative Advantage

Arbitrage is the act of buying at one place and selling at another place in order to profit from the price differences that exist between the two places.

The figure given below shows the production possibility curves for Canada (AB) and the Rest of the World (CD). The opportunity cost of producing a bushel of corn in Canada and in the Rest of the World are _____ liters and _____ liters of maple syrup respectively.

If country X has a higher labor productivity than the rest of the world in the production of a good, then country X has a comparative advantage in the production of the good.

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. Which of the following statements is true? Productivity Country A Country B Good X 1.00 0.50 Good Y 0.20 0.70

Which of the following is NOT true of a nation's production-possibility curve?

If a country exports the good that it can produce at a low opportunity cost and imports those goods that it would otherwise produce at a high opportunity cost, we say that such trade is based on:

Using relevant diagrams, illustrate a two-country two-good model in which one country has an absolute advantage in the production of both goods, but each has a comparative advantage in the production of only one good.

Which of the following is true of mercantilism?

In the two-country two-good model, both countries can gain from trade as long as their relative advantages and disadvantages in producing different goods are different.

Which of the following is true of a constant cost production-possibility curve?

If a country does not have an absolute advantage in the production of at least one commodity, then it cannot gain from free trade.

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

Filters

The figure given below shows the production possibility curves for Canada (AB) and the Rest of the World (CD). The opportunity cost of producing a bushel of corn in Canada and in the Rest of the World are _ liters and _ liters of maple syrup respectively.