Question 1

According to the following table,the US has a comparative advantage in: 
$\begin{array}{|l|c|c|}
\hline &\text { U.S. }&\text { U.K.} \
\hline \text {Wheat (bushels/hr) }& 9 & 3 \
\hline\text { Cloth (yards/hr) }& 6 & 4 \
\hline
\end{array}$

Accepted Answer

A) Wheat 
B) Cloth 
C) Both 
D) Neither 
A) Wheat 
B) Cloth 
C) Both 
D) Neither A

Question 2

According to the table below,the opportunity cost of one unit of rice for the US is equal to:

Production Possibility Schedule for Rice and Pudding in the United States and the United Kingdom
$\begin{array}{|cc|cc|}
\hline \text { United States } &&\text {United Kingdom } \
\hline \text {Rice} & \text {Pudding} &\text { Rice }& \text {Pudding} \
\hline 140 & 0 & 35 & 0 \
\hline 120 & 10 & 30 & 10 \
\hline 100 & 20 & 25 & 20 \
\hline 80 & 30 & 20 & 30 \
\hline 60 & 40 & 15 & 40 \
\hline 40 & 50 & 10 & 50 \
\hline 20 & 60 & 5 & 60 \
\hline 0 & 70 & 0 & 70 \
\hline
\end{array}$

Accepted Answer

A) 1/2 units of pudding 
B) 5 units of pudding 
C) 10 units of pudding 
D) 2 units of pudding 
A) 1/2 units of pudding 
B) 5 units of pudding 
C) 10 units of pudding 
D) 2 units of pudding A

Question 3

Japan is more efficient in the production of rice,and the United States is more efficient in the production of oranges.In the production of oranges,Japan is said to have a(n):

Accepted Answer

A) comparative advantage 
B) absolute disadvantage 
C) absolute advantage 
D) comparative disadvantage 
A) comparative advantage 
B) absolute disadvantage 
C) absolute advantage 
D) comparative disadvantage B

Question 4

According to the following table,the UK has a comparative advantage in: $\begin{array}{|l|c|c|}
\hline &\text { U.S. }&\text { U.K.} \
\hline \text {Wheat (bushels/hr) }& 9 & 3 \
\hline\text { Cloth (yards/hr) }& 6 & 4 \
\hline
\end{array}$

Accepted Answer

A) Wheat 
B) Cloth 
C) Both 
D) Neither 
A) Wheat 
B) Cloth 
C) Both 
D) Neither

Question 5

According to the following table,the US can gain from trade with the UK by getting how much cloth for 9 bushels of wheat? 
$\begin{array}{|l|c|c|}
\hline &\text { U.S. }&\text { U.K.} \
\hline \text {Wheat (bushels/hr) }& 9 & 3 \
\hline\text { Cloth (yards/hr) }& 5 & 4 \
\hline
\end{array}$

Accepted Answer

A) Only less than 12 yards of cloth 
B) Only greater than 9 yards of cloth 
C) Anything less than 5 yards of cloth 
D) Anything greater than 5 yards of cloth 
A) Only less than 12 yards of cloth 
B) Only greater than 9 yards of cloth 
C) Anything less than 5 yards of cloth 
D) Anything greater than 5 yards of cloth

Question 6

What is the only Western nation that has ever been completely free of mercantilist ideas for a given period in modern times?

Accepted Answer

A) United States 
B) France 
C) Germany 
D) England 
A) United States 
B) France 
C) Germany 
D) England

Question 7

If wage in country A is $6/hour and in country B is £2/hour,and the exchange rate between a $ and a £ is 1£=2$,then given the information in the table,what is the dollar price of a bushel of apple in Country B? $ \begin{array}{lcc} & \text { Country A } & \text { Country B } \ \text { Apple (bushels/hr) } & 8 & 1 \ \text { Orange (bushels/hr) } & 2 & 3\end{array} $

Accepted Answer

A) $0.75 
B) $1.33 
C) $3.00 
D) $4.00 
A) $0.75 
B) $1.33 
C) $3.00 
D) $4.00

Question 8

Even if Country A has an absolute advantage in the production of all commodities over country B,David Ricardo claimed that the basis for mutually beneficial trade could still exist.

Accepted Answer

A) True 
 B)False

Question 9

_____________ explains how mutually beneficial trade can take place even when one nation is less efficient than another nation in the production of all commodities.

Accepted Answer

A) Mercantilism 
B) The law of comparative advantage 
C) The labor theory of value 
D) The law of absolute advantage 
A) Mercantilism 
B) The law of comparative advantage 
C) The labor theory of value 
D) The law of absolute advantage

Question 10

According to the mercantilists:

Accepted Answer

A) Only one nation can gain from trade,and it is at the expense of other nations. 
B) All nations can gain mutually from trade without any reduction in welfare to any nation. 
C) No nations gain from trade,as it is necessary for each country to sacrifice more than they gain. 
D) Trade has nothing to do with a nation's wealth or well-being. 
A) Only one nation can gain from trade,and it is at the expense of other nations. 
B) All nations can gain mutually from trade without any reduction in welfare to any nation. 
C) No nations gain from trade,as it is necessary for each country to sacrifice more than they gain. 
D) Trade has nothing to do with a nation's wealth or well-being.

Question 11

According to the following table,the UK can gain from trade with the US by giving up how much cloth for 9 bushels of wheat? 
$\begin{array}{|l|c|c|}
\hline &\text { U.S. }&\text { U.K.} \
\hline \text {Wheat (bushels/hr) }& 9 & 3 \
\hline\text { Cloth (yards/hr) }& 5 & 4 \
\hline
\end{array}$

Accepted Answer

A) Anything less than 12 yards of cloth 
B) Anything greater than 9 yards of cloth 
C) Only less than 5 yards of cloth 
D) Only greater than 10 yards of cloth 
A) Anything less than 12 yards of cloth 
B) Anything greater than 9 yards of cloth 
C) Only less than 5 yards of cloth 
D) Only greater than 10 yards of cloth

Question 12

The concept of absolute advantage provides that the resources of trading partners are utilized most efficiently,and that the output of both commodities will:

Accepted Answer

A) fall 
B) rise 
C) stay the same 
D) increase initially,then decrease 
A) fall 
B) rise 
C) stay the same 
D) increase initially,then decrease

Question 13

______________ is the utilization of all of a trading nation's resources in the production of only one commodity.

Accepted Answer

A) Laissez-faire policy 
B) Complete specialization 
C) Incomplete specialization 
D) Mercantilism 
A) Laissez-faire policy 
B) Complete specialization 
C) Incomplete specialization 
D) Mercantilism

Question 14

Essays and pamphlets on international trade,maintaining that the only way for a nation to become rich and powerful was to export more than it imported,were written during the seventeenth and eighteenth centuries by:

Accepted Answer

A) David Ricardo 
B) Adam Smith 
C) the Mercantilists 
D) Alfred Marshall 
A) David Ricardo 
B) Adam Smith 
C) the Mercantilists 
D) Alfred Marshall

Question 15

The ability of one nation to produce a commodity using fewer resources than another nation is:

Accepted Answer

A) absolute advantage 
B) comparative advantage 
C) mercantilism 
D) specialization 
A) absolute advantage 
B) comparative advantage 
C) mercantilism 
D) specialization

Question 16

The analysis of economic forces that justify the existence of trade and its degree between two nations is referred to as:

Accepted Answer

A) basis for trade 
B) losses from trade 
C) gains from trade 
D) pattern of trade 
A) basis for trade 
B) losses from trade 
C) gains from trade 
D) pattern of trade

Question 17

According to Adam Smith,in order for two countries to voluntarily trade,both nations must gain.

Accepted Answer

A) True 
 B)False

Question 18

In the presence of trade,a nation's consumption frontier is the same as the production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 19

The production possibilities frontier shows the various combinations of two commodities that a nation can produce by utilizing anywhere from none of its resources to all of them.

Accepted Answer

A) True 
 B)False

Question 20

The increase in consumption in each nation resulting from specialization in production and trading is referred to as:

Accepted Answer

A) basis for trade 
B) losses from trade 
C) gains from trade 
D) pattern of trade 
A) basis for trade 
B) losses from trade 
C) gains from trade 
D) pattern of trade

According to the following table,the US has a comparative advantage in: U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 6 4

Japan is more efficient in the production of rice,and the United States is more efficient in the production of oranges.In the production of oranges,Japan is said to have a(n):

According to the following table,the UK has a comparative advantage in: U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 6 4

According to the following table,the US can gain from trade with the UK by getting how much cloth for 9 bushels of wheat? U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 5 4

What is the only Western nation that has ever been completely free of mercantilist ideas for a given period in modern times?

If wage in country A is $6/hour and in country B is £2/hour,and the exchange rate between a $ and a £ is 1£=2$,then given the information in the table,what is the dollar price of a bushel of apple in Country B? Country A Country B Apple (bushels/hr) 8 1 Orange (bushels/hr) 2 3

Even if Country A has an absolute advantage in the production of all commodities over country B,David Ricardo claimed that the basis for mutually beneficial trade could still exist.

_____________ explains how mutually beneficial trade can take place even when one nation is less efficient than another nation in the production of all commodities.

According to the mercantilists:

According to the following table,the UK can gain from trade with the US by giving up how much cloth for 9 bushels of wheat? U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 5 4

The concept of absolute advantage provides that the resources of trading partners are utilized most efficiently,and that the output of both commodities will:

______________ is the utilization of all of a trading nation's resources in the production of only one commodity.

Essays and pamphlets on international trade,maintaining that the only way for a nation to become rich and powerful was to export more than it imported,were written during the seventeenth and eighteenth centuries by:

The ability of one nation to produce a commodity using fewer resources than another nation is:

The analysis of economic forces that justify the existence of trade and its degree between two nations is referred to as:

According to Adam Smith,in order for two countries to voluntarily trade,both nations must gain.

In the presence of trade,a nation's consumption frontier is the same as the production possibilities frontier.

The production possibilities frontier shows the various combinations of two commodities that a nation can produce by utilizing anywhere from none of its resources to all of them.

The increase in consumption in each nation resulting from specialization in production and trading is referred to as:

Introduction to the Global Economy

The Standard Trade Model

The Heckscher-Ohlin and Other Trade Theories

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the Political Economy of Protectionism

Economic Integration

Growth and Development With International Trade

International Resource Movements and Multinational Corporations

Balance of Payments

The Foreign Exchange Market and Exchange Rates

Exchange Rate Determination

Automatic Adjustments With Flexible and Fixed Exchange Rates

Adjustment Policies

Flexible Versus Fixed Exchange Rates,european Monetary Systems,and Macroeconomic Policy Coordination

The International Monetary System: Past, present, and Future

Filters

Exam 2: Comparative Advantage

According to the following table,the US has a comparative advantage in: U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 6 4

Japan is more efficient in the production of rice,and the United States is more efficient in the production of oranges.In the production of oranges,Japan is said to have a(n):

According to the following table,the UK has a comparative advantage in: U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 6 4

According to the following table,the US can gain from trade with the UK by getting how much cloth for 9 bushels of wheat? U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 5 4

What is the only Western nation that has ever been completely free of mercantilist ideas for a given period in modern times?

If wage in country A is $6/hour and in country B is £2/hour,and the exchange rate between a $ and a £ is 1£=2$,then given the information in the table,what is the dollar price of a bushel of apple in Country B? Country A Country B Apple (bushels/hr) 8 1 Orange (bushels/hr) 2 3

Even if Country A has an absolute advantage in the production of all commodities over country B,David Ricardo claimed that the basis for mutually beneficial trade could still exist.

_____________ explains how mutually beneficial trade can take place even when one nation is less efficient than another nation in the production of all commodities.

According to the mercantilists:

According to the following table,the UK can gain from trade with the US by giving up how much cloth for 9 bushels of wheat? U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 5 4

The concept of absolute advantage provides that the resources of trading partners are utilized most efficiently,and that the output of both commodities will:

______________ is the utilization of all of a trading nation's resources in the production of only one commodity.

Essays and pamphlets on international trade,maintaining that the only way for a nation to become rich and powerful was to export more than it imported,were written during the seventeenth and eighteenth centuries by:

The ability of one nation to produce a commodity using fewer resources than another nation is:

The analysis of economic forces that justify the existence of trade and its degree between two nations is referred to as:

According to Adam Smith,in order for two countries to voluntarily trade,both nations must gain.

In the presence of trade,a nation's consumption frontier is the same as the production possibilities frontier.

The production possibilities frontier shows the various combinations of two commodities that a nation can produce by utilizing anywhere from none of its resources to all of them.

The increase in consumption in each nation resulting from specialization in production and trading is referred to as:

Introduction to the Global Economy

The Standard Trade Model

The Heckscher-Ohlin and Other Trade Theories

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the Political Economy of Protectionism

Economic Integration

Growth and Development With International Trade

International Resource Movements and Multinational Corporations

Balance of Payments

The Foreign Exchange Market and Exchange Rates

Exchange Rate Determination

Automatic Adjustments With Flexible and Fixed Exchange Rates

Adjustment Policies

Flexible Versus Fixed Exchange Rates,european Monetary Systems,and Macroeconomic Policy Coordination

The International Monetary System: Past, present, and Future

Filters