Question 1

When compared with China, the growth of clothing exports originating in Bangladesh is the result of

Accepted Answer

A)  the comparative advantage that Bangladesh has in the production of clothing for export. 
B)  the absolute advantage that China has in the production of clothing for export. 
C)  the absolute advantage that Bangladesh has in the production of clothing for export. 
D)  the comparative and absolute advantage that China has in the production of clothing for export. 
E)  the comparative and absolute advantage that Bangladesh has in the production of clothing for export. 
A)  the comparative advantage that Bangladesh has in the production of clothing for export. 
B)  the absolute advantage that China has in the production of clothing for export. 
C)  the absolute advantage that Bangladesh has in the production of clothing for export. 
D)  the comparative and absolute advantage that China has in the production of clothing for export. 
E)  the comparative and absolute advantage that Bangladesh has in the production of clothing for export.

Question 2

Given the information in the table above, if wages were to double in Home, then Home should

Accepted Answer

A)  export cloth. 
B)  export widgets. 
C)  export both and import nothing. 
D)  export and import nothing. 
E)  export widgets and import cloth. 
A)  export cloth. 
B)  export widgets. 
C)  export both and import nothing. 
D)  export and import nothing. 
E)  export widgets and import cloth.

Question 3

If a production possibilities frontier is a straight line, then production occurs under conditions of

Accepted Answer

A)  increasing opportunity costs. 
B)  constant opportunity costs. 
C)  decreasing opportunity costs. 
D)  infinite opportunity costs. 
E)  uncertain opportunity costs. 
A)  increasing opportunity costs. 
B)  constant opportunity costs. 
C)  decreasing opportunity costs. 
D)  infinite opportunity costs. 
E)  uncertain opportunity costs.

Question 4

Mahatma Gandhi exhorted his followers in India to promote economic welfare by decreasing imports. This approach

Accepted Answer

A)  makes no sense. 
B)  makes no economic sense. 
C)  is consistent with the the Ricardian model of comparative advantage. 
D)  is not consistent with the Ricardian model of comparative advantage. 
E)  guarantees benefits for Indian workers. 
A)  makes no sense. 
B)  makes no economic sense. 
C)  is consistent with the the Ricardian model of comparative advantage. 
D)  is not consistent with the Ricardian model of comparative advantage. 
E)  guarantees benefits for Indian workers.

Question 5

How does the two-good, two-country version of the Ricardian model differ from the two-country, many-good model in terms of the determination which goods are produced and exported by each country?

Accepted Answer

In the two-good-two-country version of t

Question 6

The pauper labor and the exploitation arguments

Accepted Answer

A)  are theoretical weaknesses that limit the applicability of the Ricardian concept of comparative advantage. 
B)  are theoretically irrelevant to the Ricardian model, and do not limit its logical relevance. 
C)  are not relevant because the Ricardian model is based on the labor theory of value. 
D)  are not relevant because the Ricardian model allows for different technologies in different countries. 
E)  invalidate the Ricardian model. 
A)  are theoretical weaknesses that limit the applicability of the Ricardian concept of comparative advantage. 
B)  are theoretically irrelevant to the Ricardian model, and do not limit its logical relevance. 
C)  are not relevant because the Ricardian model is based on the labor theory of value. 
D)  are not relevant because the Ricardian model allows for different technologies in different countries. 
E)  invalidate the Ricardian model.

Question 7

Given the information in the table above, Home's opportunity cost of widgets is

Accepted Answer

A)  0.5. 
B)  2.0. 
C)  6.0. 
D)  1.5. 
E)  3.0. 
A)  0.5. 
B)  2.0. 
C)  6.0. 
D)  1.5. 
E)  3.0.

Question 8

In 1975, wage levels in South Korea were roughly 5% of those in the United States. It is obvious that if the United States had allowed Korean goods to be freely imported into the United States at that time, this would have caused devastation to the standard of living in the United States, because no producer in this country could possibly compete with such low wages. Discuss this assertion in the context of the Ricardian model of comparative advantage.

Accepted Answer

Regardless of relative wage levels, the

Question 9

In a two-product, two-country world, international trade can lead to increases in

Accepted Answer

A)  consumer welfare only if output of both products is increased. 
B)  output of both products and consumer welfare in both countries. 
C)  total production of both products but not consumer welfare in both countries. 
D)  consumer welfare in both countries but not total production of both products. 
E)  prices of both goods in both countries. 
A)  consumer welfare only if output of both products is increased. 
B)  output of both products and consumer welfare in both countries. 
C)  total production of both products but not consumer welfare in both countries. 
D)  consumer welfare in both countries but not total production of both products. 
E)  prices of both goods in both countries.

Question 10

Many countries in sub-Saharan Africa have very low labor productivities in many sectors, for example in manufacturing and agriculture. They often despair of even trying to attempt to build their industries unless it is done in an autarkic context, behind protectionist walls because they do not believe they can compete with more productive industries abroad. Discuss this issue in the context of the Ricardian model of comparative advantage.

Accepted Answer

The Ricardian model of comparative advan

Question 11

The Ricardian model demonstrates that

Accepted Answer

A)  trade between two countries will benefit both countries. 
B)  trade between two countries may benefit both regardless of which good each exports. 
C)  trade between two countries may benefit both if each exports the product in which it has a comparative advantage. 
D)  trade between two countries may benefit one but harm the other. 
E)  trade between two countries always benefits the country with a larger labor force. 
A)  trade between two countries will benefit both countries. 
B)  trade between two countries may benefit both regardless of which good each exports. 
C)  trade between two countries may benefit both if each exports the product in which it has a comparative advantage. 
D)  trade between two countries may benefit one but harm the other. 
E)  trade between two countries always benefits the country with a larger labor force.

Question 12

Given the information in the table above, if it is ascertained that Foreign uses prison-slave labor to produce its exports, then home should

Accepted Answer

A)  export cloth. 
B)  export widgets. 
C)  export both and import nothing. 
D)  export and import nothing. 
E)  export widgets and import cloth. 
A)  export cloth. 
B)  export widgets. 
C)  export both and import nothing. 
D)  export and import nothing. 
E)  export widgets and import cloth.

Question 13

Which of the following is most likely to be an untraded good in a Ricardian two-country, multi-good model?

Accepted Answer

A)  steel 
B)  textiles 
C)  haircuts 
D)  petroleum 
E)  telemarketer services 
A)  steel 
B)  textiles 
C)  haircuts 
D)  petroleum 
E)  telemarketer services

Question 14

When compared with China, the growth of clothing exports originating in Bangladesh clearly illustrates the difference between absolute and comparative advantage. Discuss and explain.

Accepted Answer

While Bangladesh has an absolute disadva

Question 15

If labor productivities were exactly proportional to wage levels internationally, this would

Accepted Answer

A)  not negate the logical basis for trade in the Ricardian model. 
B)  render the Ricardian model theoretically correct but practically useless. 
C)  negate the logical basis for trade in the Ricardian model. 
D)  negate the applicability of the Ricardian model if the number of products were greater than the number of trading partners. 
E)  demonstrate the validity of the Ricardian model. 
A)  not negate the logical basis for trade in the Ricardian model. 
B)  render the Ricardian model theoretically correct but practically useless. 
C)  negate the logical basis for trade in the Ricardian model. 
D)  negate the applicability of the Ricardian model if the number of products were greater than the number of trading partners. 
E)  demonstrate the validity of the Ricardian model.

Question 16

The Ricardian model attributes the gains from trade associated with the principle of comparative advantage result to

Accepted Answer

A)  differences in technology. 
B)  differences in preferences. 
C)  differences in labor productivity. 
D)  differences in resources. 
E)  gravity relationships among countries. 
A)  differences in technology. 
B)  differences in preferences. 
C)  differences in labor productivity. 
D)  differences in resources. 
E)  gravity relationships among countries.

Question 17

Given the information in the table above, Foreign's opportunity cost of widgets is

Accepted Answer

A)  0.5. 
B)  2.0. 
C)  6.0. 
D)  1.5. 
E)  3.0. 
A)  0.5. 
B)  2.0. 
C)  6.0. 
D)  1.5. 
E)  3.0.

Question 18

Given the information in the table above, Foreign's opportunity cost of cloth is

Accepted Answer

A)  0.5. 
B)  2.0. 
C)  6.0. 
D)  1.5. 
E)  3.0. 
A)  0.5. 
B)  2.0. 
C)  6.0. 
D)  1.5. 
E)  3.0.

Question 19

A nation engaging in trade according to the Ricardian model will find its consumption bundle

Accepted Answer

A)  inside its production possibilities frontier. 
B)  on its production possibilities frontier. 
C)  outside its production possibilities frontier. 
D)  inside its trade-partner's production possibilities frontier. 
E)  on its trade-partner's production possibilities frontier. 
A)  inside its production possibilities frontier. 
B)  on its production possibilities frontier. 
C)  outside its production possibilities frontier. 
D)  inside its trade-partner's production possibilities frontier. 
E)  on its trade-partner's production possibilities frontier.

Question 20

In the Ricardian model, comparative advantage is likely to be due to

Accepted Answer

A)  scale economies. 
B)  home product taste bias. 
C)  greater capital availability per worker. 
D)  labor productivity differences. 
E)  political pressure. 
A)  scale economies. 
B)  home product taste bias. 
C)  greater capital availability per worker. 
D)  labor productivity differences. 
E)  political pressure.

When compared with China, the growth of clothing exports originating in Bangladesh is the result of

Given the information in the table above, if wages were to double in Home, then Home should

If a production possibilities frontier is a straight line, then production occurs under conditions of

Mahatma Gandhi exhorted his followers in India to promote economic welfare by decreasing imports. This approach

How does the two-good, two-country version of the Ricardian model differ from the two-country, many-good model in terms of the determination which goods are produced and exported by each country?

The pauper labor and the exploitation arguments

Given the information in the table above, Home's opportunity cost of widgets is

In a two-product, two-country world, international trade can lead to increases in

The Ricardian model demonstrates that

Given the information in the table above, if it is ascertained that Foreign uses prison-slave labor to produce its exports, then home should

Which of the following is most likely to be an untraded good in a Ricardian two-country, multi-good model?

When compared with China, the growth of clothing exports originating in Bangladesh clearly illustrates the difference between absolute and comparative advantage. Discuss and explain.

If labor productivities were exactly proportional to wage levels internationally, this would

The Ricardian model attributes the gains from trade associated with the principle of comparative advantage result to

Given the information in the table above, Foreign's opportunity cost of widgets is

Given the information in the table above, Foreign's opportunity cost of cloth is

A nation engaging in trade according to the Ricardian model will find its consumption bundle

In the Ricardian model, comparative advantage is likely to be due to

Introduction

World Trade: an Overview

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: an Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

Exam 3: Labor Productivity and Comparative Advantage: the Ricardian Model

When compared with China, the growth of clothing exports originating in Bangladesh is the result of

Given the information in the table above, if wages were to double in Home, then Home should

If a production possibilities frontier is a straight line, then production occurs under conditions of

Mahatma Gandhi exhorted his followers in India to promote economic welfare by decreasing imports. This approach

How does the two-good, two-country version of the Ricardian model differ from the two-country, many-good model in terms of the determination which goods are produced and exported by each country?

The pauper labor and the exploitation arguments

Given the information in the table above, Home's opportunity cost of widgets is

In a two-product, two-country world, international trade can lead to increases in

The Ricardian model demonstrates that

Given the information in the table above, if it is ascertained that Foreign uses prison-slave labor to produce its exports, then home should

Which of the following is most likely to be an untraded good in a Ricardian two-country, multi-good model?

When compared with China, the growth of clothing exports originating in Bangladesh clearly illustrates the difference between absolute and comparative advantage. Discuss and explain.

If labor productivities were exactly proportional to wage levels internationally, this would

The Ricardian model attributes the gains from trade associated with the principle of comparative advantage result to

Given the information in the table above, Foreign's opportunity cost of widgets is

Given the information in the table above, Foreign's opportunity cost of cloth is

A nation engaging in trade according to the Ricardian model will find its consumption bundle

In the Ricardian model, comparative advantage is likely to be due to

Introduction

World Trade: an Overview

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: an Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters