Exam 32: Comparative Advantage and the Open Economy

Consider a world of two countries producing only wheat and cloth. In one hour, residents of Country A can produce 1 unit of wheat and 0.5 unit of cloth, whereas residents of Country B can produce 0.3 unit of wheat and 0.4 unit of cloth. Country A should export

-According to the above table, which assumes that opportunity costs of producing goods X and Y are constant, Chen has comparative advantage in production of

Restrictions on imports

Which of the following is a TRUE statement?

Maximum Feasible Hourly Production Rates for Either Food or Cloth Using All Available Resources -Using the data in the above table and assuming constant opportunity costs, it is correct to state that

Arguments in support of protectionism (and against free trade) include all of the following EXCEPT

A difference between a quota and a tariff is that

In an hour Jane can solder 50 connections or inspect 20 parts while Jim can solder 25 connections or inspect 20 parts in an hour.

Which of the following is NOT an example of a regional trade bloc?

The argument that a tariff has to be imposed in order to protect any industry just getting started until it gets large enough to be competitive internationally is the

A group of nations that grants member special trade privileges is

Quotas and tariffs both serve the purpose of

Comparative advantage is based on the

Trade restrictions tend to make domestic products

The two groups that benefit the most from quotas are

Given two economic systems, A and B, if economy A has a absolute advantage in the production of widgets, then

Maximum Feasible Hourly Production Rates (in Tons) of Either Wine or Beef Using All Available Resources Product Argentina France Wine (gallons) 30 60 Beef (pounds) 10 30 -Use the above table. Assuming constant opportunity costs, the opportunity cost of producing a gallon of wine in France is

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product United States Mexico Computers 8 10 Bicycles 4 2 -Refer to the above table. Assuming constant opportunity costs, the opportunity cost of producing a bicycle in the United States is ________ while the opportunity cost of producing a bicycle in Mexico is ________.

Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can either produce a maximum of eight pies or two cakes in a day. Ethel's opportunity cost to produce one cake is

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product United States Mexico Computers 8 10 Bicycles 4 2 -Refer to the above table. Assuming constant opportunity costs, the opportunity cost of producing a computer in the United States is ________ while the opportunity cost of producing a computer in Mexico is ________.