Question 1

A quota decreases the volume of imports,whereas a tariff typically has no impact on the volume of imports.

Accepted Answer

A) True 
 B)False

Question 2

The opportunity costs of production in two countries engaged in trade

Accepted Answer

A) determine which country has an absolute advantage 
B) influence their domestic inflation rates 
C) lead to a higher level of economic efficiency 
D) create shifts of the production possibilities frontiers (PPF's)of both nations 
E) define the limits of the terms of trade 
A) determine which country has an absolute advantage 
B) influence their domestic inflation rates 
C) lead to a higher level of economic efficiency 
D) create shifts of the production possibilities frontiers (PPF's)of both nations 
E) define the limits of the terms of trade

Question 3

If Panama has a high opportunity cost of producing salmon steaks,then it should export salmon steaks.

Accepted Answer

A) True 
 B)False

Question 4

In general,a society will benefit more,the more interdependent it is.

Accepted Answer

A) True 
 B)False

Question 5

Figure 16-2
Number of workers needed to produce one unit of each of the following goods:
  
-In Figure 16-2,if Colombia produces four fewer calculators,then how many more radios could it produce?

Accepted Answer

A) 8 
B) 2 
C) 16 
D) 4 
E) 12 
A) 8 
B) 2 
C) 16 
D) 4 
E) 12

Question 6

Both tariffs and quotas

Accepted Answer

A) benefit domestic consumers by lowering prices 
B) benefit domestic consumers by expanding consumption choices 
C) are illegal in the United States 
D) benefit domestic producers 
E) are policy tools that help bring about free trade 
A) benefit domestic consumers by lowering prices 
B) benefit domestic consumers by expanding consumption choices 
C) are illegal in the United States 
D) benefit domestic producers 
E) are policy tools that help bring about free trade

Question 7

Suppose that the opportunity cost of producing a rocking chair in Mexico is 50 basketballs and the opportunity cost of a rocking chair in Japan is 80 basketballs.Japan and Mexico can realize mutual gains if the terms of trade are

Accepted Answer

A) greater than 80 basketballs per rocking chair,and Japan produces rocking chairs 
B) between 50 and 80 basketballs per rocking chair,and Japan produces basketballs 
C) greater than 80 basketballs per rocking chair,and Mexico produces basketballs 
D) less than 50 basketballs per rocking chair,and Japan produces basketballs 
E) between 50 and 80 basketballs per rocking chair,and Japan produces rocking chairs 
A) greater than 80 basketballs per rocking chair,and Japan produces rocking chairs 
B) between 50 and 80 basketballs per rocking chair,and Japan produces basketballs 
C) greater than 80 basketballs per rocking chair,and Mexico produces basketballs 
D) less than 50 basketballs per rocking chair,and Japan produces basketballs 
E) between 50 and 80 basketballs per rocking chair,and Japan produces rocking chairs

Question 8

If free international trade opens up and a country has a comparative disadvantage in sugar production,we should expect

Accepted Answer

A) greater sugar consumption in that country 
B) higher sugar prices in that country 
C) greater sugar production in that country 
D) lower sugar prices in sugar-exporting countries 
E) greater sugar consumption in sugar-exporting countries 
A) greater sugar consumption in that country 
B) higher sugar prices in that country 
C) greater sugar production in that country 
D) lower sugar prices in sugar-exporting countries 
E) greater sugar consumption in sugar-exporting countries

Question 9

If Japan imposes a tariff on shoes from Argentina,then

Accepted Answer

A) the price of Argentinean shoes sold in Japan will fall 
B) the quantity of Argentinean shoes sold in Japan will rise 
C) Japanese shoe producers will benefit 
D) Japanese consumers will benefit from lower prices for Japanese shoes 
E) Japanese consumers will benefit from lower prices for Argentinean shoes 
A) the price of Argentinean shoes sold in Japan will fall 
B) the quantity of Argentinean shoes sold in Japan will rise 
C) Japanese shoe producers will benefit 
D) Japanese consumers will benefit from lower prices for Japanese shoes 
E) Japanese consumers will benefit from lower prices for Argentinean shoes

Question 10

Assume that India has a comparative advantage in producing a computer game.The United States has an absolute advantage in producing the same game.Mutually advantageous trade will have India producing and exporting the game while the United States will specialize in producing something else.

Accepted Answer

A) True 
 B)False

Question 11

Comparative advantage is determined by the

Accepted Answer

A) elasticities of demand for a good in two countries 
B) opportunity costs of producing a good in two different countries 
C) presence of absolute advantages in production 
D) degrees of allocative efficiency within each economy 
E) amounts of resources required to produce a good in different countries 
A) elasticities of demand for a good in two countries 
B) opportunity costs of producing a good in two different countries 
C) presence of absolute advantages in production 
D) degrees of allocative efficiency within each economy 
E) amounts of resources required to produce a good in different countries

Question 12

For each watch Denmark produces,it gives up the opportunity to produce 50 pounds of cheese.France can produce two watches at a cost of 150 pounds of cheese.Which of the following is true?

Accepted Answer

A) Denmark has a comparative advantage in producing both watches and cheese. 
B) France has a comparative advantage in producing both watches and cheese. 
C) France has the comparative advantage in producing watches. 
D) Denmark has the comparative advantage in producing watches. 
E) Denmark has the comparative advantage in producing cheese. 
A) Denmark has a comparative advantage in producing both watches and cheese. 
B) France has a comparative advantage in producing both watches and cheese. 
C) France has the comparative advantage in producing watches. 
D) Denmark has the comparative advantage in producing watches. 
E) Denmark has the comparative advantage in producing cheese.

Question 13

Which of the following must be true in order to engage in advantageous international trade?

Accepted Answer

A) It must be producing at a point on its production possibilities frontier. 
B) It must be economically efficient. 
C) It must have a comparative advantage in producing one of the goods being traded. 
D) There must be no potential Pareto improvements available in the economy. 
E) It must have an absolute advantage in producing one good being traded. 
A) It must be producing at a point on its production possibilities frontier. 
B) It must be economically efficient. 
C) It must have a comparative advantage in producing one of the goods being traded. 
D) There must be no potential Pareto improvements available in the economy. 
E) It must have an absolute advantage in producing one good being traded.

Question 14

Protectionism is

Accepted Answer

A) the belief that a nation's industries should be protected from foreign competition 
B) the belief that a nation's consumers should be protected from foreign competition 
C) based on the idea that economies of scale are important 
D) consistent with absolute advantage,but not with comparative advantage 
E) the favored approach of pro-trade groups 
A) the belief that a nation's industries should be protected from foreign competition 
B) the belief that a nation's consumers should be protected from foreign competition 
C) based on the idea that economies of scale are important 
D) consistent with absolute advantage,but not with comparative advantage 
E) the favored approach of pro-trade groups

Question 15

If Egypt can produce 3 silver candlesticks or 120 small silver cups in an hour and Turkey can produce 4 silver candlesticks or 160 small silver cups in an hour then

Accepted Answer

A) neither country would gain by trading 
B) the terms of trade or 40 silver cups per one silver candlestick and Egypt should only produce silver cups. 
C) the terms of trade or 40 silver cups per one silver candlestick and Turkey should only produce silver cups. 
D) the terms of trade or 40 silver cups per one silver candlestick and Egypt should only produce candlesticks. 
E) the terms of trade or 40 silver cups per one silver candlestick and Turkey should only produce candlesticks. 
A) neither country would gain by trading 
B) the terms of trade or 40 silver cups per one silver candlestick and Egypt should only produce silver cups. 
C) the terms of trade or 40 silver cups per one silver candlestick and Turkey should only produce silver cups. 
D) the terms of trade or 40 silver cups per one silver candlestick and Egypt should only produce candlesticks. 
E) the terms of trade or 40 silver cups per one silver candlestick and Turkey should only produce candlesticks.

Question 16

If Armenia can produce rugs more efficiently than any other country,it does not necessarily benefit from producing rugs for international trade.

Accepted Answer

A) True 
 B)False

Question 17

Assume Japan must forego producing 60 computers for each automobile it produces.Moreover,the United States can produce one automobile if it forgoes producing 80 computers.Which of the following is true?

Accepted Answer

A) The United States has a lower opportunity cost of producing automobiles. 
B) The United States has a comparative advantage in producing automobiles. 
C) Japan has a comparative advantage in producing computers. 
D) No trade will occur between Japan and the United States. 
E) Japan has a lower opportunity cost of producing automobiles. 
A) The United States has a lower opportunity cost of producing automobiles. 
B) The United States has a comparative advantage in producing automobiles. 
C) Japan has a comparative advantage in producing computers. 
D) No trade will occur between Japan and the United States. 
E) Japan has a lower opportunity cost of producing automobiles.

Question 18

Assume that Canadian firms can produce one automobile or 1,000 calculators per day,and that U.S.firms can produce three automobiles or 6,000 calculators per day.The terms of trade should be between

Accepted Answer

A) 1,000 and 2,000 calculators per automobile,and the U.S.should produce both calculators and automobiles 
B) 1,000 and 6,000 calculators per automobile,and the U.S.should produce automobiles 
C) 1,000 and 6,000 calculators per automobile,and the U.S.should produce calculators 
D) 1,000 and 2,000 calculators per automobile,and the U.S.should produce automobiles 
E) 1,000 and 2,000 calculators per automobile,and Canada should produce automobiles 
A) 1,000 and 2,000 calculators per automobile,and the U.S.should produce both calculators and automobiles 
B) 1,000 and 6,000 calculators per automobile,and the U.S.should produce automobiles 
C) 1,000 and 6,000 calculators per automobile,and the U.S.should produce calculators 
D) 1,000 and 2,000 calculators per automobile,and the U.S.should produce automobiles 
E) 1,000 and 2,000 calculators per automobile,and Canada should produce automobiles

Question 19

If Country A exports a good to Country B,who is made worse off?

Accepted Answer

A) The producers in Country A and the consumers in Country B 
B) The consumers in Country A and the consumers in Country B 
C) The producers in Country A and the producers in Country B 
D) The consumers in Country A and the producers in Country B 
E) Only the consumers in Country A will be worse off from this trade agreement 
A) The producers in Country A and the consumers in Country B 
B) The consumers in Country A and the consumers in Country B 
C) The producers in Country A and the producers in Country B 
D) The consumers in Country A and the producers in Country B 
E) Only the consumers in Country A will be worse off from this trade agreement

Question 20

Suppose that for each automobile Japan produces it must forego producing 40 computers.The United States must forego producing 80 computers for each automobile it produces.Which of the following is true?

Accepted Answer

A) Japan has a comparative advantage in producing computers. 
B) the U.S.has a comparative advantage in producing computers. 
C) the U.S.has a comparative advantage in producing automobiles. 
D) the U.S.has an absolute advantage in producing automobiles. 
E) the opportunity cost of producing computers is the same for Japan and the U.S. 
A) Japan has a comparative advantage in producing computers. 
B) the U.S.has a comparative advantage in producing computers. 
C) the U.S.has a comparative advantage in producing automobiles. 
D) the U.S.has an absolute advantage in producing automobiles. 
E) the opportunity cost of producing computers is the same for Japan and the U.S.

A quota decreases the volume of imports,whereas a tariff typically has no impact on the volume of imports.

The opportunity costs of production in two countries engaged in trade

If Panama has a high opportunity cost of producing salmon steaks,then it should export salmon steaks.

In general,a society will benefit more,the more interdependent it is.

Figure 16-2 Number of workers needed to produce one unit of each of the following goods: -In Figure 16-2,if Colombia produces four fewer calculators,then how many more radios could it produce?

Both tariffs and quotas

Suppose that the opportunity cost of producing a rocking chair in Mexico is 50 basketballs and the opportunity cost of a rocking chair in Japan is 80 basketballs.Japan and Mexico can realize mutual gains if the terms of trade are

If free international trade opens up and a country has a comparative disadvantage in sugar production,we should expect

If Japan imposes a tariff on shoes from Argentina,then

Assume that India has a comparative advantage in producing a computer game.The United States has an absolute advantage in producing the same game.Mutually advantageous trade will have India producing and exporting the game while the United States will specialize in producing something else.

Comparative advantage is determined by the

For each watch Denmark produces,it gives up the opportunity to produce 50 pounds of cheese.France can produce two watches at a cost of 150 pounds of cheese.Which of the following is true?

Which of the following must be true in order to engage in advantageous international trade?

Protectionism is

If Egypt can produce 3 silver candlesticks or 120 small silver cups in an hour and Turkey can produce 4 silver candlesticks or 160 small silver cups in an hour then

If Armenia can produce rugs more efficiently than any other country,it does not necessarily benefit from producing rugs for international trade.

Assume Japan must forego producing 60 computers for each automobile it produces.Moreover,the United States can produce one automobile if it forgoes producing 80 computers.Which of the following is true?

Assume that Canadian firms can produce one automobile or 1,000 calculators per day,and that U.S.firms can produce three automobiles or 6,000 calculators per day.The terms of trade should be between

If Country A exports a good to Country B,who is made worse off?

Suppose that for each automobile Japan produces it must forego producing 40 computers.The United States must forego producing 80 computers for each automobile it produces.Which of the following is true?

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Filters

Exam 17: Comparative Advantage and the Gains From International Trade

A quota decreases the volume of imports,whereas a tariff typically has no impact on the volume of imports.

The opportunity costs of production in two countries engaged in trade

If Panama has a high opportunity cost of producing salmon steaks,then it should export salmon steaks.

In general,a society will benefit more,the more interdependent it is.

Figure 16-2 Number of workers needed to produce one unit of each of the following goods: -In Figure 16-2,if Colombia produces four fewer calculators,then how many more radios could it produce?

Both tariffs and quotas

Suppose that the opportunity cost of producing a rocking chair in Mexico is 50 basketballs and the opportunity cost of a rocking chair in Japan is 80 basketballs.Japan and Mexico can realize mutual gains if the terms of trade are

If free international trade opens up and a country has a comparative disadvantage in sugar production,we should expect

If Japan imposes a tariff on shoes from Argentina,then

Assume that India has a comparative advantage in producing a computer game.The United States has an absolute advantage in producing the same game.Mutually advantageous trade will have India producing and exporting the game while the United States will specialize in producing something else.

Comparative advantage is determined by the

For each watch Denmark produces,it gives up the opportunity to produce 50 pounds of cheese.France can produce two watches at a cost of 150 pounds of cheese.Which of the following is true?

Which of the following must be true in order to engage in advantageous international trade?

Protectionism is

If Egypt can produce 3 silver candlesticks or 120 small silver cups in an hour and Turkey can produce 4 silver candlesticks or 160 small silver cups in an hour then

If Armenia can produce rugs more efficiently than any other country,it does not necessarily benefit from producing rugs for international trade.

Assume Japan must forego producing 60 computers for each automobile it produces.Moreover,the United States can produce one automobile if it forgoes producing 80 computers.Which of the following is true?

Assume that Canadian firms can produce one automobile or 1,000 calculators per day,and that U.S.firms can produce three automobiles or 6,000 calculators per day.The terms of trade should be between

If Country A exports a good to Country B,who is made worse off?

Suppose that for each automobile Japan produces it must forego producing 40 computers.The United States must forego producing 80 computers for each automobile it produces.Which of the following is true?

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Filters