Question 1

What is offshoring?

Accepted Answer

A)  When workers in a foreign country are hired by a domestic firm to produce something sold domestically 
B)  Importing a manufactured goods made by a foreign firm 
C)  Exporting a good or service to buyers in other countries 
D)  When domestic workers are hired by a domestic firm to produce something sold exclusively in other countries 
A)  When workers in a foreign country are hired by a domestic firm to produce something sold domestically 
B)  Importing a manufactured goods made by a foreign firm 
C)  Exporting a good or service to buyers in other countries 
D)  When domestic workers are hired by a domestic firm to produce something sold exclusively in other countries

Question 2

Exports are domestically produced goods and services _________.

Accepted Answer

A)  sold to other countries 
B)  sold to the government 
C)  sold at home 
D)  which are used to produce other goods and services 
A)  sold to other countries 
B)  sold to the government 
C)  sold at home 
D)  which are used to produce other goods and services

Question 3

Table 19.1
 $$\begin{array} { | l | c | c | } 
\hline & \text { Bathing } & \text { Grooming } \
\hline \text { Linda } & 60 & 20 \
\hline \text { Sandy } & 50 & 25 \
\hline
\end{array}$$ Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 19.1 lists the number of dogs Linda and Sandy can each bathe and groom in one week.
-Refer to Table 19.1.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Sandy has a comparative advantage in dog grooming. 
B)  Linda has a comparative advantage in dog grooming. 
C)  Linda has a comparative advantage in dog grooming and dog bathing. 
D)  Sandy has a comparative advantage in dog bathing. 
A)  Sandy has a comparative advantage in dog grooming. 
B)  Linda has a comparative advantage in dog grooming. 
C)  Linda has a comparative advantage in dog grooming and dog bathing. 
D)  Sandy has a comparative advantage in dog bathing.

Question 4

Table 19.6
Production and
Consumption Production
Without Trade with Trade
 $$\begin{array} { | l | l | l | l| l | } 
\hline & \text { Clerks } & \text { Hats } & \text { Clerks } & \text { Hats } \
\hline \text { Denmark } & 900 & 150 & 1200 & 0 \
\hline \text { Belize } & 150 & 100 & 0 & 400 \
\hline
\end{array}$$ Denmark and Belize can produce both clocks and hats. Table 19.6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19.6.Prior to trade,what was the opportunity cost to produce one clock in Denmark?

Accepted Answer

A)  1/6 of a hat 
B)  2/3 of a hat 
C)  1.5 hats 
D)  6 hats 
A)  1/6 of a hat 
B)  2/3 of a hat 
C)  1.5 hats 
D)  6 hats

Question 5

Table 19.5
 $$\begin{array} { | l | c | c | } 
\hline & \text { Baws } & \text { Arrows } \
\hline \text { Ahmet } & 20 & 80 \
\hline \text { MyLinh } & 25 & 75 \
\hline
\end{array}$$ Table 19.5 shows the output per week for bows and arrows by Ahmet and MyLinh.
-Refer to Table 19.5.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh.
 $$\begin{array} { | l | l | l | } 
\hline & \text { Bows } & \text { Arrows } \
\hline \text { Ahmet } & & \
\hline \text { MyLinh } & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | c | c

Question 6

Table 19.2
 $$\begin{array} { | l | l | l | } 
\hline & \text { Pies } & \text { Cakes } \
\hline \text { Sarita } & 15 & 25 \
\hline \text { Gabriel } & 12 & 16 \
\hline
\end{array}$$ Sarita and Gabriel own S&G Bakery. Table 19.2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 19.2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Sarita has an absolute advantage in baking cakes and Gabriel has an absolute advantage in baking pies. 
B)  Sarita has an absolute advantage in baking pies and Gabriel has an absolute advantage in baking cakes. 
C)  Sarita has an absolute advantage in baking pies and cakes. 
D)  Gabriel has an absolute advantage in baking pies and cakes. 
A)  Sarita has an absolute advantage in baking cakes and Gabriel has an absolute advantage in baking pies. 
B)  Sarita has an absolute advantage in baking pies and Gabriel has an absolute advantage in baking cakes. 
C)  Sarita has an absolute advantage in baking pies and cakes. 
D)  Gabriel has an absolute advantage in baking pies and cakes.

Question 7

Imposing tariffs in cases of dumping __________.

Accepted Answer

A)  is allowed under the WTO agreement 
B)  is not allowed under the WTO agreement 
C)  is not addressed by the WTO agreement 
D)  has never occurred, even though it is allowed under the WTO agreement 
A)  is allowed under the WTO agreement 
B)  is not allowed under the WTO agreement 
C)  is not addressed by the WTO agreement 
D)  has never occurred, even though it is allowed under the WTO agreement

Question 8

The best example of a quota from the list below is __________.

Accepted Answer

A)  a subsidy from the government to domestic manufacturers of tires to enable them to compete more effectively with foreign producers 
B)  a limit on the quantity of tires that can be imported from a foreign country 
C)  a 40 per cent fee imposed on all imported tires 
D)  a tax placed on all tires sold in the domestic market to help offset the impact of lost jobs in the domestic tire industry 
A)  a subsidy from the government to domestic manufacturers of tires to enable them to compete more effectively with foreign producers 
B)  a limit on the quantity of tires that can be imported from a foreign country 
C)  a 40 per cent fee imposed on all imported tires 
D)  a tax placed on all tires sold in the domestic market to help offset the impact of lost jobs in the domestic tire industry

Question 9

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

Accepted Answer

A) True 
 B)False

Question 10

Selling a product at a price below its cost is known as dumping.

Accepted Answer

A) True 
 B)False

Question 11

A quota is the same as a voluntary export restraint.

Accepted Answer

A) True 
 B)False

Question 12

Under autarky,consumer surplus is represented by the area _________.

Accepted Answer

A)  above the supply curve and below the equilibrium price 
B)  above the supply curve and below the demand curve 
C)  below the demand curve and above the equilibrium price 
D)  above the demand curve and below the supply curve 
A)  above the supply curve and below the equilibrium price 
B)  above the supply curve and below the demand curve 
C)  below the demand curve and above the equilibrium price 
D)  above the demand curve and below the supply curve

Question 13

What is a tariff?

Accepted Answer

A)  A limit placed on the quantity of goods that can be imported into a country. 
B)  A tax imposed by a government on goods imported into a country. 
C)  A subsidy granted to importers of a vital input. 
D)  A health and safety restriction imposed on an imported product. 
A)  A limit placed on the quantity of goods that can be imported into a country. 
B)  A tax imposed by a government on goods imported into a country. 
C)  A subsidy granted to importers of a vital input. 
D)  A health and safety restriction imposed on an imported product.

Question 14

Under autarky,domestic producer surplus is represented by the area _________.

Accepted Answer

A)  above the supply curve and below the equilibrium price 
B)  above the supply curve and below the demand curve 
C)  below the demand curve and above the equilibrium price 
D)  above the demand curve and below the supply curve 
A)  above the supply curve and below the equilibrium price 
B)  above the supply curve and below the demand curve 
C)  below the demand curve and above the equilibrium price 
D)  above the demand curve and below the supply curve

Question 15

Table 19.2
 $$\begin{array} { | l | l | l | } 
\hline & \text { Pies } & \text { Cakes } \
\hline \text { Sarita } & 15 & 25 \
\hline \text { Gabriel } & 12 & 16 \
\hline
\end{array}$$ Sarita and Gabriel own S&G Bakery. Table 19.2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 19.2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Sarita has a greater opportunity cost than Gabriel for baking cakes. 
B)  Sarita's opportunity cost for baking cakes is less than Gabriel's. 
C)  Gabriel has a greater opportunity cost than Sarita for baking pies. 
D)  Gabriel's opportunity cost for baking cakes and baking pies are both greater than Sarita's. 
A)  Sarita has a greater opportunity cost than Gabriel for baking cakes. 
B)  Sarita's opportunity cost for baking cakes is less than Gabriel's. 
C)  Gabriel has a greater opportunity cost than Sarita for baking pies. 
D)  Gabriel's opportunity cost for baking cakes and baking pies are both greater than Sarita's.

Question 16

If a country has an absolute advantage in producing a product,it must also have a comparative advantage in producing that product.

Accepted Answer

A) True 
 B)False

Question 17

China has developed a comparative advantage in the production of clothing.The source of this comparative advantage is _________.

Accepted Answer

A)  a large supply of natural resources 
B)  a large supply of unskilled workers and relatively little capital 
C)  investment in capital used to produce clothing 
D)  superior process technology 
A)  a large supply of natural resources 
B)  a large supply of unskilled workers and relatively little capital 
C)  investment in capital used to produce clothing 
D)  superior process technology

Question 18

Table 19.6
Production and
Consumption Production
Without Trade with Trade
 $$\begin{array} { | l | l | l | l| l | } 
\hline & \text { Clerks } & \text { Hats } & \text { Clerks } & \text { Hats } \
\hline \text { Denmark } & 900 & 150 & 1200 & 0 \
\hline \text { Belize } & 150 & 100 & 0 & 400 \
\hline
\end{array}$$ Denmark and Belize can produce both clocks and hats. Table 19.6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19.6.With trade,what is the total gain in hat production?

Accepted Answer

A)  150 
B)  300 
C)  400 
D)  650 
A)  150 
B)  300 
C)  400 
D)  650

Question 19

Which of the following is not a source of comparative advantage?

Accepted Answer

A)  Relative abundance of labour and capital 
B)  Technology 
C)  Climate and natural resources 
D)  A strong foreign currency exchange rate 
A)  Relative abundance of labour and capital 
B)  Technology 
C)  Climate and natural resources 
D)  A strong foreign currency exchange rate

Question 20

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that _________.

Accepted Answer

A)  Bulgaria also has an absolute advantage in producing sandals relative to Finland 
B)  Bulgaria has a lower opportunity cost of producing sandals relative to Finland 
C)  Finland has an absolute disadvantage in producing sandals relative to Bulgaria 
D)  labour costs are higher for sandal producers in Finland than in Bulgaria 
A)  Bulgaria also has an absolute advantage in producing sandals relative to Finland 
B)  Bulgaria has a lower opportunity cost of producing sandals relative to Finland 
C)  Finland has an absolute disadvantage in producing sandals relative to Bulgaria 
D)  labour costs are higher for sandal producers in Finland than in Bulgaria

What is offshoring?

Exports are domestically produced goods and services _________.

Table 19.1 Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 19.1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19.1.Select the statement that accurately interprets the data in the table.

Table 19.5 Baws Arrows Ahmet 20 80 MyLinh 25 75 Table 19.5 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 19.5.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh. Bows Arrows Ahmet MyLinh

Table 19.2 Pies Cakes Sarita 15 25 Gabriel 12 16 Sarita and Gabriel own S&G Bakery. Table 19.2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 19.2.Select the statement that accurately interprets the data in the table.

Imposing tariffs in cases of dumping __________.

The best example of a quota from the list below is __________.

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

Selling a product at a price below its cost is known as dumping.

A quota is the same as a voluntary export restraint.

Under autarky,consumer surplus is represented by the area _________.

What is a tariff?

Under autarky,domestic producer surplus is represented by the area _________.

Table 19.2 Pies Cakes Sarita 15 25 Gabriel 12 16 Sarita and Gabriel own S&G Bakery. Table 19.2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 19.2.Select the statement that accurately interprets the data in the table.

If a country has an absolute advantage in producing a product,it must also have a comparative advantage in producing that product.

China has developed a comparative advantage in the production of clothing.The source of this comparative advantage is _________.

Which of the following is not a source of comparative advantage?

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that _________.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

Filters

Exam 19: Comparative Advantage and the Gains From International Trade

What is offshoring?

Exports are domestically produced goods and services _________.

Table 19.1 Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 19.1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19.1.Select the statement that accurately interprets the data in the table.

Table 19.5 Baws Arrows Ahmet 20 80 MyLinh 25 75 Table 19.5 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 19.5.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh. Bows Arrows Ahmet MyLinh

Table 19.2 Pies Cakes Sarita 15 25 Gabriel 12 16 Sarita and Gabriel own S&G Bakery. Table 19.2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 19.2.Select the statement that accurately interprets the data in the table.

Imposing tariffs in cases of dumping __________.

The best example of a quota from the list below is __________.

The process of countries becoming more open to foreign trade and investment is known as outsourcing.

Selling a product at a price below its cost is known as dumping.

A quota is the same as a voluntary export restraint.

Under autarky,consumer surplus is represented by the area _________.

What is a tariff?

Under autarky,domestic producer surplus is represented by the area _________.

Table 19.2 Pies Cakes Sarita 15 25 Gabriel 12 16 Sarita and Gabriel own S&G Bakery. Table 19.2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 19.2.Select the statement that accurately interprets the data in the table.

If a country has an absolute advantage in producing a product,it must also have a comparative advantage in producing that product.

China has developed a comparative advantage in the production of clothing.The source of this comparative advantage is _________.

Which of the following is not a source of comparative advantage?

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that _________.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

Filters