Question 1

What results has the Republic of Korea experienced from its change in policies?

Accepted Answer

It has successfully industrialized.Its index of openness is many times greater and incomes have grown almost 6 percent per year over the period.

Question 2

Free trade may be good for a nation,but not for everyone in the nation.Explain why free trade is controversial and the list the justifications that proponents of trade adjustment assistance offer in support of those policies.

Accepted Answer

The nation as a whole is better off as long as the gains from the winners exceed the losses from the losers.Restructuring means that some industries are dying and workers and producers have to find other opportunities.This may be difficult for not only those directly involved in the industry,but also for the surrounding communities.Adjustment assistance states that since the nation as a whole benefits from trade,there are newly added resources that can be used for compensation.Second,there is a potential ethical obligation to assist those hurt by economic change.Third,compensation reduces the incentives for those hurt by trade to fight against free trade policies.

Question 3

If two countries agree to specialize and trade based on comparative advantage,which of the following is most likely to be TRUE?

Accepted Answer

A) Both of the countries will consume outside their respective production possibilities curves. 
B) One of the countries will end up receiving all of the gains from trade. 
C) One of the countries will both consume and produce on its production possibilities curve. 
D) Only one of the countries will produce on and consume outside its production possibilities curve. 
A) Both of the countries will consume outside their respective production possibilities curves. 
B) One of the countries will end up receiving all of the gains from trade. 
C) One of the countries will both consume and produce on its production possibilities curve. 
D) Only one of the countries will produce on and consume outside its production possibilities curve. A

Question 4

If a nation has no absolute advantage,then it

Accepted Answer

A) cannot gain from trade. 
B) still gains from trade. 
C) can only gain from trade if it raises its productivity levels. 
D) can only gain from trade if it reduces wages paid. 
E) can only gain from trade if it produces outside its production possibilities curve. 
A) cannot gain from trade. 
B) still gains from trade. 
C) can only gain from trade if it raises its productivity levels. 
D) can only gain from trade if it reduces wages paid. 
E) can only gain from trade if it produces outside its production possibilities curve.

Question 5

Suppose that Paraguay can produce 12 wheat or 3 corn and Bolivia can produce 4 wheat or 2 corn.Suppose that opportunity costs are constant.Which of the following is a potentially agreeable trade arrangement for Paraguay and Bolivia?

Accepted Answer

A) Paraguay trades one corn to Bolivia for three units of wheat. 
B) Bolivia trades one corn to Paraguay for three units of wheat. 
C) Bolivia trades one corn to Paraguay for one wheat. 
D) Paraguay trades one wheat to Bolivia for two corn. 
A) Paraguay trades one corn to Bolivia for three units of wheat. 
B) Bolivia trades one corn to Paraguay for three units of wheat. 
C) Bolivia trades one corn to Paraguay for one wheat. 
D) Paraguay trades one wheat to Bolivia for two corn.

Question 6

Adam Smith created the theory of comparative advantage.

Accepted Answer

A) True 
 B)False

Question 7

The economic philosophy that favors strict limits on imports and strong support for exports is called

Accepted Answer

A) zero sum. 
B) autarky. 
C) mercantilism. 
D) comparative advantage. 
E) absolute advantage. 
A) zero sum. 
B) autarky. 
C) mercantilism. 
D) comparative advantage. 
E) absolute advantage.

Question 8

Suppose that Canada can produce 15 units of timber or 3 units of grain.Suppose that Mexico can produce 6 units of timber or 2 units of grain.Which of the following is CORRECT?

Accepted Answer

A) Mexico has a comparative advantage in grain production. 
B) Mexico has an absolute advantage in timber production. 
C) Canada has a comparative advantage in grain production. 
D) The countries would find trade mutually beneficial at a trading ratio of 1 grain for 2 timber. 
A) Mexico has a comparative advantage in grain production. 
B) Mexico has an absolute advantage in timber production. 
C) Canada has a comparative advantage in grain production. 
D) The countries would find trade mutually beneficial at a trading ratio of 1 grain for 2 timber.

Question 9

Competition between the United States and Mexico is

Accepted Answer

A) equivalent to the competition between two giant corporations. 
B) a struggle over which country will get the best jobs. 
C) unfair if wages in Mexico are lower than in the United States. 
D) a struggle over which country will keep the most advanced technology. 
E) not a meaningful way to analyze trade. 
A) equivalent to the competition between two giant corporations. 
B) a struggle over which country will get the best jobs. 
C) unfair if wages in Mexico are lower than in the United States. 
D) a struggle over which country will keep the most advanced technology. 
E) not a meaningful way to analyze trade.

Question 10

Describe some of the key controversies regarding global cotton trade between high cost and low cost cotton producers.

Accepted Answer

Low cost cotton producers produce less c

Question 11

Which economist introduced the simple trade model and the concept of trade based on comparative advantage?

Accepted Answer

The answer of Which economist introduced the simple trade model...

Question 12

In the simple trade model,what is assumed about labor?

Accepted Answer

It is perfectly mobi

Question 13

A nation must have an absolute advantage in order to have a comparative advantage in producing a good or service.

Accepted Answer

A) True 
 B)False

Question 14

For a country in autarky,the opportunity cost of the good on the horizontal axis is the same as

Accepted Answer

A) the relative price of the good on the vertical axis. 
B) the relative price of the good on the horizontal axis. 
C) the opportunity cost of the good on the vertical axis. 
D) Both A and C. 
E) None of the above. 
A) the relative price of the good on the vertical axis. 
B) the relative price of the good on the horizontal axis. 
C) the opportunity cost of the good on the vertical axis. 
D) Both A and C. 
E) None of the above.

Question 15

Suppose Mexico can produce 5 autos or 10 corn.Suppose the United States can produce 4 autos or 20 corn.If opportunity costs are constant for both countries,which of the following would NOT be a potential terms of trade?

Accepted Answer

A) 1 auto for 3 corn 
B) 1 auto for 4 corn 
C) 1 corn for 1/3 of an auto 
D) 1 corn for 1 auto 
A) 1 auto for 3 corn 
B) 1 auto for 4 corn 
C) 1 corn for 1/3 of an auto 
D) 1 corn for 1 auto

Question 16

Suppose that Sandy can produce 10 economic reports or make 2 sales calls.Suppose Tim can produce 2 economic reports or make 1 sales call.Which of the following is CORRECT?

Accepted Answer

A) The opportunity cost for Sandy of producing one economics report is 1/5 of a sales call. 
B) The opportunity cost for Sandy of producing one sales call is 10 economics reports. 
C) The opportunity cost for Tim of producing one sales call is 1/2 of an economics report. 
D) The opportunity cost for Tim of producing one economics report is 2 sales calls. 
A) The opportunity cost for Sandy of producing one economics report is 1/5 of a sales call. 
B) The opportunity cost for Sandy of producing one sales call is 10 economics reports. 
C) The opportunity cost for Tim of producing one sales call is 1/2 of an economics report. 
D) The opportunity cost for Tim of producing one economics report is 2 sales calls.

Question 17

Mercantilists perceived trade as a zero sum game.

Accepted Answer

A) True 
 B)False

Question 18

If the world price for a good is above a nation's pre-trade equilibrium price,then the nation

Accepted Answer

A) will export the good. 
B) will import the good. 
C) will neither export nor import the good. 
D) cannot gain from trade. 
E) Both C and D. 
A) will export the good. 
B) will import the good. 
C) will neither export nor import the good. 
D) cannot gain from trade. 
E) Both C and D.

Question 19

When did the Republic of Korea change its economic policies?

Accepted Answer

The answer of When did the Republic of Korea change...

Question 20

All individuals and firms in a country must gain from trade in order for it to be beneficial to the nation.

Accepted Answer

A) True 
 B)False

What results has the Republic of Korea experienced from its change in policies?

Free trade may be good for a nation,but not for everyone in the nation.Explain why free trade is controversial and the list the justifications that proponents of trade adjustment assistance offer in support of those policies.

If two countries agree to specialize and trade based on comparative advantage,which of the following is most likely to be TRUE?

If a nation has no absolute advantage,then it

Suppose that Paraguay can produce 12 wheat or 3 corn and Bolivia can produce 4 wheat or 2 corn.Suppose that opportunity costs are constant.Which of the following is a potentially agreeable trade arrangement for Paraguay and Bolivia?

Adam Smith created the theory of comparative advantage.

The economic philosophy that favors strict limits on imports and strong support for exports is called

Suppose that Canada can produce 15 units of timber or 3 units of grain.Suppose that Mexico can produce 6 units of timber or 2 units of grain.Which of the following is CORRECT?

Competition between the United States and Mexico is

Describe some of the key controversies regarding global cotton trade between high cost and low cost cotton producers.

Which economist introduced the simple trade model and the concept of trade based on comparative advantage?

In the simple trade model,what is assumed about labor?

A nation must have an absolute advantage in order to have a comparative advantage in producing a good or service.

For a country in autarky,the opportunity cost of the good on the horizontal axis is the same as

Suppose Mexico can produce 5 autos or 10 corn.Suppose the United States can produce 4 autos or 20 corn.If opportunity costs are constant for both countries,which of the following would NOT be a potential terms of trade?

Suppose that Sandy can produce 10 economic reports or make 2 sales calls.Suppose Tim can produce 2 economic reports or make 1 sales call.Which of the following is CORRECT?

Mercantilists perceived trade as a zero sum game.

If the world price for a good is above a nation's pre-trade equilibrium price,then the nation

When did the Republic of Korea change its economic policies?

All individuals and firms in a country must gain from trade in order for it to be beneficial to the nation.

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

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Exam 3: Comparative Advantage and the Gains From Trade

What results has the Republic of Korea experienced from its change in policies?

Free trade may be good for a nation,but not for everyone in the nation.Explain why free trade is controversial and the list the justifications that proponents of trade adjustment assistance offer in support of those policies.

If two countries agree to specialize and trade based on comparative advantage,which of the following is most likely to be TRUE?

If a nation has no absolute advantage,then it

Suppose that Paraguay can produce 12 wheat or 3 corn and Bolivia can produce 4 wheat or 2 corn.Suppose that opportunity costs are constant.Which of the following is a potentially agreeable trade arrangement for Paraguay and Bolivia?

Adam Smith created the theory of comparative advantage.

The economic philosophy that favors strict limits on imports and strong support for exports is called

Suppose that Canada can produce 15 units of timber or 3 units of grain.Suppose that Mexico can produce 6 units of timber or 2 units of grain.Which of the following is CORRECT?

Competition between the United States and Mexico is

Describe some of the key controversies regarding global cotton trade between high cost and low cost cotton producers.

Which economist introduced the simple trade model and the concept of trade based on comparative advantage?

In the simple trade model,what is assumed about labor?

A nation must have an absolute advantage in order to have a comparative advantage in producing a good or service.

For a country in autarky,the opportunity cost of the good on the horizontal axis is the same as

Suppose Mexico can produce 5 autos or 10 corn.Suppose the United States can produce 4 autos or 20 corn.If opportunity costs are constant for both countries,which of the following would NOT be a potential terms of trade?

Suppose that Sandy can produce 10 economic reports or make 2 sales calls.Suppose Tim can produce 2 economic reports or make 1 sales call.Which of the following is CORRECT?

Mercantilists perceived trade as a zero sum game.

If the world price for a good is above a nation's pre-trade equilibrium price,then the nation

When did the Republic of Korea change its economic policies?

All individuals and firms in a country must gain from trade in order for it to be beneficial to the nation.

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters