Question 1

Assume the MPLt = 5 tennis rackets and MPLb = 4 baseball bats.If the
Economy has 100 workers, then the economy can produce:

Accepted Answer

A) a maximum of 500 tennis rackets. 
B) a maximum of 350 baseball bats. 
C) 500 tennis rackets and 400 baseball bats. 
D) either 100 tennis rackets only or 100 baseball bats only. 
A) a maximum of 500 tennis rackets. 
B) a maximum of 350 baseball bats. 
C) 500 tennis rackets and 400 baseball bats. 
D) either 100 tennis rackets only or 100 baseball bats only. A

Question 2

Figure: International Trade Equilibrium   
(Figure: International Trade Equilibrium) How many units of cloth will
this nation export or import?

Accepted Answer

It will export 150 units of wheat.

Question 3

Figure: Upperia's Production and Consumption   (Figure: Upperia's Production and Consumption) The graph shows
Upperia's international trading pattern.Point P is production with trade,
And point C is consumption with trade.Which product does Home
Import?

Accepted Answer

A) shoes 
B) shirts 
C) Home imports neither shirts nor shoes. 
D) Home imports both shirts and shoes. 
A) shoes 
B) shirts 
C) Home imports neither shirts nor shoes. 
D) Home imports both shirts and shoes. B

Question 4

Suppose that there is an improvement in a country's terms of trade
Between 2010 and 2011.This improvement means that:

Accepted Answer

A) it can purchase more imports in 2011, with the same volume of exports as in 2010. 
B) it can purchase more exports in 2011, with the same volume of exports as in 2010. 
C) it needs to increase its exports in order to purchase the same volume of imports as in 2011. 
D) regarding its international trade, it is worse off in 2011 than it was in 2010. 
A) it can purchase more imports in 2011, with the same volume of exports as in 2010. 
B) it can purchase more exports in 2011, with the same volume of exports as in 2010. 
C) it needs to increase its exports in order to purchase the same volume of imports as in 2011. 
D) regarding its international trade, it is worse off in 2011 than it was in 2010.

Question 5

It can be shown that differences in "before­trade" relative prices will
Determine:

Accepted Answer

A) which nation has the absolute advantage. 
B) which good each nation will export or import. 
C) the quantity traded by each nation. 
D) which nation has the comparative advantage. 
A) which nation has the absolute advantage. 
B) which good each nation will export or import. 
C) the quantity traded by each nation. 
D) which nation has the comparative advantage.

Question 6

SCENARIO: ABSOLUTE AND COMPARATIVE ADVANTAGE
Poland requires 4 hours of labor to produce a ton of coal and 10 hours of
Labor to produce 10 bushels of wheat.The Czech Republic requires 6
Hours of labor to produce a ton of coal and 10 hours of labor to produce
10 bushels of wheat.
Reference: Ref 2­5
(Scenario: Absolute and Comparative Advantage) Which country has an
Absolute advantage in the production of coal?

Accepted Answer

A) Poland 
B) the Czech Republic 
C) Neither country has an absolute advantage. 
D) Both countries have an absolute advantage. 
A) Poland 
B) the Czech Republic 
C) Neither country has an absolute advantage. 
D) Both countries have an absolute advantage.

Question 7

Assume that Germany and China can produce beer and cloth.If the
MPLc/MPLb for Germany is 2/5 and MPLc/MPLb for China is 1, then
Germany and China have a comparative advantage in:

Accepted Answer

A) cloth and beer, respectively. 
B) beer and cloth, respectively. 
C) beer. 
D) cloth. 
A) cloth and beer, respectively. 
B) beer and cloth, respectively. 
C) beer. 
D) cloth.

Question 8

SCENARIO: HOME'S WILLINGNESS TO TRADE WHEAT FOR CLOTH
Home has a comparative advantage in wheat, and Foreign has a
Comparative advantage in cloth.Once trade occurs, Home produces
1,500 bushels of wheat, and Foreign produces 1,000 yards of cloth.The
Following table shows the amount of wheat that Home is willing to trade
To acquire more cloth.  
Reference: Ref 2­13
(Scenario: Home's Willingness to Trade Wheat for Cloth) Suppose that
Home's export price rose from 0.5 bushel of wheat per yard of cloth in
2009 to a bushel of wheat per yard of cloth in 2010.What does this
Movement represent in terms of Home's terms of trade?

Accepted Answer

A) It is an improvement in Home's terms of trade. 
B) It is a deterioration in Home's terms of trade. 
C) There is no change in Home's terms of trade. 
D) The answer cannot be determined based on the information provided. 
A) It is an improvement in Home's terms of trade. 
B) It is a deterioration in Home's terms of trade. 
C) There is no change in Home's terms of trade. 
D) The answer cannot be determined based on the information provided.

Question 9

The international relative price and total quantity of a traded good or
Service is determined by:

Accepted Answer

A) labor shortages that occur worldwide. 
B) the World Trade Organization. 
C) the intersection of the total world import demand curve with the total world export supply curve. 
D) natural resource availability compared with the industrial demand for those products. 
A) labor shortages that occur worldwide. 
B) the World Trade Organization. 
C) the intersection of the total world import demand curve with the total world export supply curve. 
D) natural resource availability compared with the industrial demand for those products.

Question 10

A country's factors of production include its:

Accepted Answer

A) labor. 
B) capital. 
C) natural resources. 
D) labor, capital, and natural resources. 
A) labor. 
B) capital. 
C) natural resources. 
D) labor, capital, and natural resources.

Question 11

Assume that Germany and China can produce beer and cloth.If the
MPLc/MPLb for Germany is 2/5 and MPLc/MPLb for China is 1, then China
Should:

Accepted Answer

A) specialize in producing beer and export beer. 
B) specialize in producing cloth and export cloth. 
C) not specialize, because China will not benefit from it. 
D) specialize in producing cloth and import cloth. 
A) specialize in producing beer and export beer. 
B) specialize in producing cloth and export cloth. 
C) not specialize, because China will not benefit from it. 
D) specialize in producing cloth and import cloth.

Question 12

Why is a country able to consume outside its production possibilities
frontier when it engages in international trade?

Accepted Answer

It can completely specialize in the good

Question 13

Figure: Upperia's Production and Consumption   (Figure: Upperia's Production and Consumption) The graph shows
Upperia's international trading pattern.What is the autarkic price of
Shirts in Upperia?

Accepted Answer

A) 5/4 shirts per unit of pair of shoes 
B) 4/5 shirts per unit of pair of shoes 
C) 5/4 pair of shoes per shirt 
D) 4/5 pair of shoes per shirt 
A) 5/4 shirts per unit of pair of shoes 
B) 4/5 shirts per unit of pair of shoes 
C) 5/4 pair of shoes per shirt 
D) 4/5 pair of shoes per shirt

Question 14

Suppose that China and the United States only trade wheat and textiles with each other.
The following graph gives the U.S.supply curve for its exports of wheat to China and the
Chinese demand curve for its imports of wheat from the United States.   
A) How many tons of wheat did the United States produce prior to trade with China?
B) How many tons of wheat did China produce prior to trade with the United States?
C) What is the international price of wheat in U.S.-Chinese trade?
D) What will happen to the international price of wheat and Chinese imports from the
United States if there is a severe drought that reduces the size of the U.S.wheat
harvest?
E) What will happen to the international price of wheat and Chinese imports if there is a
severe drought in China that reduces the size of its wheat harvest?

Accepted Answer

A) 1 bushel = 1 yard or 1 yard = 1 bushe

Question 15

SCENARIO: CHILE AND ARGENTINA
Chile and Argentina each produce jellybeans and peanut butter, using
Labor as their only resource.Each country has 1,000 hours of labor.In
Chile, an hour produces a pound of jellybeans and 2 hours produce a
Pound of peanut butter.In Argentina, an hour produces a pound of
Jellybeans and 3 hours produces a pound of peanut butter.When they do
Not trade with each other, Chile consumes 600 pounds of jellybeans and
200 pounds of peanut butter, and Argentina consumes 400 pounds of
Jellybeans and 200 pounds of peanut butter.
Reference: Ref 2­10
(Scenario: Chile and Argentina) Suppose that Chile and Argentina begin
To trade with one another.Each completely specializes in the product in
Which it finds its comparative advantage.How many pounds of peanut
Butter and jellybeans do the two countries jointly produce?

Accepted Answer

A) 1,000 pounds of jellybeans and 400 pounds of peanut butter 
B) 1,000 pounds of jellybeans and 500 pounds of peanut butter 
C) 500 pounds of jellybeans and 1,000 pounds of peanut butter 
D) 333.33 pounds of jellybeans and 500 pounds of peanut butter 
A) 1,000 pounds of jellybeans and 400 pounds of peanut butter 
B) 1,000 pounds of jellybeans and 500 pounds of peanut butter 
C) 500 pounds of jellybeans and 1,000 pounds of peanut butter 
D) 333.33 pounds of jellybeans and 500 pounds of peanut butter

Question 16

When a country requires more resources to produce a product than other
Countries, it is said to have a(n):

Accepted Answer

A) absolute disadvantage in the production of the product. 
B) comparative disadvantage in the production of the product. 
C) lower opportunity cost of producing the product. 
D) higher opportunity cost of producing the product. 
A) absolute disadvantage in the production of the product. 
B) comparative disadvantage in the production of the product. 
C) lower opportunity cost of producing the product. 
D) higher opportunity cost of producing the product.

Question 17

Figure: International Trade Equilibrium   
(Figure: International Trade Equilibrium) Which line shows the "before
trade" relative price in this nation?

Accepted Answer

The answer of Figure: International Trade Equilibrium   
(Figure:...

Question 18

International trade allows countries to:

Accepted Answer

A) produce outside their PPF. 
B) produce inside their PPF. 
C) consume inside their PPF. 
D) consume outside their PPF. 
A) produce outside their PPF. 
B) produce inside their PPF. 
C) consume inside their PPF. 
D) consume outside their PPF.

Question 19

The focus of the Ricardian model is on how differences in _________
Influence international trade patterns.

Accepted Answer

A) demand 
B) comparative costs 
C) absolute costs 
D) transportation costs 
A) demand 
B) comparative costs 
C) absolute costs 
D) transportation costs

Question 20

The slope of the PPF can be expressed as:

Accepted Answer

A) the ratio of abundance of capital to labor. 
B) the preferences of consumers in terms of marginal utility. 
C) the ratio of the quantities of good 1 and good 2. 
D) the negative of the ratio of the marginal products of labor in producing each good. 
A) the ratio of abundance of capital to labor. 
B) the preferences of consumers in terms of marginal utility. 
C) the ratio of the quantities of good 1 and good 2. 
D) the negative of the ratio of the marginal products of labor in producing each good.

Assume the MPLt = 5 tennis rackets and MPLb = 4 baseball bats.If the Economy has 100 workers, then the economy can produce:

Figure: International Trade Equilibrium (Figure: International Trade Equilibrium) How many units of cloth will this nation export or import?

Figure: Upperia's Production and Consumption (Figure: Upperia's Production and Consumption) The graph shows Upperia's international trading pattern.Point P is production with trade, And point C is consumption with trade.Which product does Home Import?

Suppose that there is an improvement in a country's terms of trade Between 2010 and 2011.This improvement means that:

It can be shown that differences in "beforetrade" relative prices will Determine:

Assume that Germany and China can produce beer and cloth.If the MPLc/MPLb for Germany is 2/5 and MPLc/MPLb for China is 1, then Germany and China have a comparative advantage in:

The international relative price and total quantity of a traded good or Service is determined by:

A country's factors of production include its:

Assume that Germany and China can produce beer and cloth.If the MPLc/MPLb for Germany is 2/5 and MPLc/MPLb for China is 1, then China Should:

Why is a country able to consume outside its production possibilities frontier when it engages in international trade?

Figure: Upperia's Production and Consumption (Figure: Upperia's Production and Consumption) The graph shows Upperia's international trading pattern.What is the autarkic price of Shirts in Upperia?

When a country requires more resources to produce a product than other Countries, it is said to have a(n):

Figure: International Trade Equilibrium (Figure: International Trade Equilibrium) Which line shows the "before trade" relative price in this nation?

International trade allows countries to:

The focus of the Ricardian model is on how differences in _________ Influence international trade patterns.

The slope of the PPF can be expressed as:

The Global Economy

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

Exam 2: Trade and Technology: the Ricardian Model

Assume the MPLt = 5 tennis rackets and MPLb = 4 baseball bats.If the Economy has 100 workers, then the economy can produce:

Figure: International Trade Equilibrium (Figure: International Trade Equilibrium) How many units of cloth will this nation export or import?

Figure: Upperia's Production and Consumption (Figure: Upperia's Production and Consumption) The graph shows Upperia's international trading pattern.Point P is production with trade, And point C is consumption with trade.Which product does Home Import?

Suppose that there is an improvement in a country's terms of trade Between 2010 and 2011.This improvement means that:

It can be shown that differences in "before­trade" relative prices will Determine:

Assume that Germany and China can produce beer and cloth.If the MPLc/MPLb for Germany is 2/5 and MPLc/MPLb for China is 1, then Germany and China have a comparative advantage in:

The international relative price and total quantity of a traded good or Service is determined by:

A country's factors of production include its:

Assume that Germany and China can produce beer and cloth.If the MPLc/MPLb for Germany is 2/5 and MPLc/MPLb for China is 1, then China Should:

Why is a country able to consume outside its production possibilities frontier when it engages in international trade?

Figure: Upperia's Production and Consumption (Figure: Upperia's Production and Consumption) The graph shows Upperia's international trading pattern.What is the autarkic price of Shirts in Upperia?

When a country requires more resources to produce a product than other Countries, it is said to have a(n):

Figure: International Trade Equilibrium (Figure: International Trade Equilibrium) Which line shows the "before trade" relative price in this nation?

International trade allows countries to:

The focus of the Ricardian model is on how differences in _________ Influence international trade patterns.

The slope of the PPF can be expressed as:

The Global Economy

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

It can be shown that differences in "beforetrade" relative prices will Determine: