Exam 17: Comparative Advantage and the Gains From International Trade

A nation has a comparative advantage in producing a good if it has a lower opportunity cost of producing that good than other countries have.

If Japan can produce each unit of steel using fewer resources than Canada uses,

If Armenia can produce two rugs or 100 spy novels in an hour,and Turkey can produce one rug or 50 spy novels in an hour,

Mutually beneficial trade between two countries is possible only as long as

In an Israeli factory,each worker can produce 2/5 of a shirt in an hour or 1/3 of a pair of pants in an hour.If there are 500 workers in the factory,then the maximum number of shirts that can be made in an hour is

Which of the following factors does not help explain incomplete specialization by countries that trade in accordance with comparative advantage?

Assume the North Island of New Zealand can produce 2,000 fishing poles or 20 kayaks per day and the South Island can produce 1,000 fishing poles or 5 kayaks per day.The South Island has a comparative advantage in producing kayaks.

If free international trade is compromised by the imposition of an import quota or tariff,

The limits of the terms of trade between two countries are determined by those countries' opportunity costs of production.

Mutually beneficial international trade between two countries depends on

One reason why there may be a bias against free trade is that

Objections to free trade

Assume that Spain can produce a commodity using fewer resources than any other country.Spain will export this commodity even if other countries have a lower opportunity cost of producing it.

Figure 16-5 Quantities of goods that can be produced in one day with available resources: -In Figure 16-5,which of the following is true?

Which of the following statements correctly describes international trade in accordance with comparative advantage?

A quota typically increases the volume of imports,whereas a tariff typically decreases the volume of imports.

The cost of producing a car in Germany is 2,000 bushels of wheat,and the cost of producing a car in Canada is 1,200 bushels of wheat.The two countries can both benefit if the terms of trade are

If 50 units of resources can produce either 1 ton of sugar beets or 100 lb.of ham in Germany,while 90 units of resources can produce either 2 tons of sugar beets or 300 lb.of ham in Poland,

Consider the following information on labor hours needed per unit of output: Ignoring nonlabor inputs,which of the following statements is correct?

An effective import quota will