Question 1

Mercantilists advocated a policy in which:

Accepted Answer

A) The government regulates all aspects of economic activity 
B) The government interferes with economic activity to a moderate level 
C) The government keeps regulation of economic activity to a minimum 
D) The governments interference in economic activity is completely non-existent 
A) The government regulates all aspects of economic activity 
B) The government interferes with economic activity to a moderate level 
C) The government keeps regulation of economic activity to a minimum 
D) The governments interference in economic activity is completely non-existent

Question 2

Which of these economists considered comparative advantage in production to be the basis for trade between nations?

Accepted Answer

A) Adam Smith 
B) Alfred Marshall 
C) David Ricardo 
D) David Hume 
A) Adam Smith 
B) Alfred Marshall 
C) David Ricardo 
D) David Hume

Question 3

With respect to international trade,a zero-sum game is one in which:

Accepted Answer

A) Only one nation can gain from trade,and it is at the expense of other nations 
B) All nations can gain from trade mutually 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) Only the two nations engaged in trade will benefit and the other nations will lose. 
A) Only one nation can gain from trade,and it is at the expense of other nations 
B) All nations can gain from trade mutually 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) Only the two nations engaged in trade will benefit and the other nations will lose.

Question 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,the United States 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

Question 5

Could a country which has no absolute advantage in anything still trade and benefit from trade?

Accepted Answer

Yes,trade will be beneficial to this cou

Question 6

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 rice,the United States 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

Question 7

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 rice,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

Question 8

Adam Smith advocated a policy in which:

Accepted Answer

A) The government regulates all aspects of economic activity 
B) The government interferes with economic activity to a moderate level 
C) The government keeps regulation of economic activity to a minimum 
D) The governments interference in economic activity is completely non-existent 
A) The government regulates all aspects of economic activity 
B) The government interferes with economic activity to a moderate level 
C) The government keeps regulation of economic activity to a minimum 
D) The governments interference in economic activity is completely non-existent

Question 9

______________ states that the true cost of a commodity is the amount of a second commodity that must be given up to release just enough resources to produce one more unit of the first commodity:

Accepted Answer

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

Question 10

In the table below both countries produce at the bold levels of output without trade.Assume the US and UK initiate trade and begin to completely specialize in the commodity in which they have a comparative advantage.What would the gains from trade be if the US trades 50 units of rice to the UK for 50 units of pudding? 
Production Possibility Schedule for Rice and Pudding in the United States and the United Kingdom
$\begin{array}{|cc|cc|}
\hline \text { United States } &&\text {United Kingdom } \
\hline \text {Rice} & \text {Pudding} &\text { Rice }& \text {Pudding} \
\hline 140 & 0 & 35 & 0 \
\hline 120 & 10 & 30 & 20 \
\hline 100 & 20 & 25 & 40 \
\hline 80 & 30 & 20 & 60 \
\hline 60 & 40 & 15 & 80 \
\hline 40 & 50 & 10 & 100 \
\hline 20 & 60 & 5 & 120 \
\hline 0 & 70 & 0 & 140 \
\hline
\end{array}$

Accepted Answer

A) US: 10 units of pudding,20 units of rice 
B) US: 20 units of pudding,10 units of rice 
C) UK: 10 units of pudding,20 units of rice 
D) UK: 20 units of pudding,10 units of rice 
A) US: 10 units of pudding,20 units of rice 
B) US: 20 units of pudding,10 units of rice 
C) UK: 10 units of pudding,20 units of rice 
D) UK: 20 units of pudding,10 units of rice

Question 11

According to the following table,if the US trades 9 bushels of wheat to the UK for 9 yards of cloth,the US gains from trade will equal: $\begin{array}{|l|c|c|}
\hline &\text { U.S. }&\text { U.K.} \
\hline \text {Wheat (bushels/hr) }& 9 & 3 \
\hline\text { Cloth (yards/hr) }& 5 & 4 \
\hline
\end{array}$

Accepted Answer

A) 4 bushels of wheat 
B) 3 yards of cloth 
C) 4 yards of cloth 
D) 5 bushels of wheat 
A) 4 bushels of wheat 
B) 3 yards of cloth 
C) 4 yards of cloth 
D) 5 bushels of wheat

Question 12

Describe the major points of the mercantilists' view of trade and how they differ from today's views.

Accepted Answer

Mercantilists believed that the only way

Question 13

The mercantilists would have objected to:

Accepted Answer

A) the use of tariffs or quotas to restrict imports 
B) international trade based on open markets 
C) export promotion policies initiated by the government 
D) trade policies designed to accumulate gold 
A) the use of tariffs or quotas to restrict imports 
B) international trade based on open markets 
C) export promotion policies initiated by the government 
D) trade policies designed to accumulate gold

Question 14

A laissez-faire policy is one in which:

Accepted Answer

A) The government regulates all aspects of economic activity 
B) The government interferes with economic activity to a moderate level 
C) The government keeps regulation of economic activity to a minimum 
D) The governments interference in economic activity is completely non-existent 
A) The government regulates all aspects of economic activity 
B) The government interferes with economic activity to a moderate level 
C) The government keeps regulation of economic activity to a minimum 
D) The governments interference in economic activity is completely non-existent

Question 15

The theory of absolute advantage was how David Ricardo explained basis for trade between nations.

Accepted Answer

A) True 
 B)False

Question 16

The school of thought during the seventeenth and eighteenth centuries proposing that the way for a nation to become richer was to restrict imports and stimulate exports was:

Accepted Answer

A) Mercantilist 
B) Classical School 
C) Laissez Faire 
D) Opportunity cost 
A) Mercantilist 
B) Classical School 
C) Laissez Faire 
D) Opportunity cost

Mercantilists advocated a policy in which:

Which of these economists considered comparative advantage in production to be the basis for trade between nations?

With respect to international trade,a zero-sum game is one in which:

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,the United States is said to have a(n):

Could a country which has no absolute advantage in anything still trade and benefit from trade?

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 rice,the United States is said to have a(n):

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 rice,Japan is said to have a(n):

Adam Smith advocated a policy in which:

______________ states that the true cost of a commodity is the amount of a second commodity that must be given up to release just enough resources to produce one more unit of the first commodity:

According to the following table,if the US trades 9 bushels of wheat to the UK for 9 yards of cloth,the US gains from trade will equal: U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 5 4

Describe the major points of the mercantilists' view of trade and how they differ from today's views.

The mercantilists would have objected to:

A laissez-faire policy is one in which:

The theory of absolute advantage was how David Ricardo explained basis for trade between nations.

The school of thought during the seventeenth and eighteenth centuries proposing that the way for a nation to become richer was to restrict imports and stimulate exports was:

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

Mercantilists advocated a policy in which:

Which of these economists considered comparative advantage in production to be the basis for trade between nations?

With respect to international trade,a zero-sum game is one in which:

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,the United States is said to have a(n):

Could a country which has no absolute advantage in anything still trade and benefit from trade?

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 rice,the United States is said to have a(n):

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 rice,Japan is said to have a(n):

Adam Smith advocated a policy in which:

______________ states that the true cost of a commodity is the amount of a second commodity that must be given up to release just enough resources to produce one more unit of the first commodity:

According to the following table,if the US trades 9 bushels of wheat to the UK for 9 yards of cloth,the US gains from trade will equal: U.S. U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 5 4

Describe the major points of the mercantilists' view of trade and how they differ from today's views.

The mercantilists would have objected to:

A laissez-faire policy is one in which:

The theory of absolute advantage was how David Ricardo explained basis for trade between nations.

The school of thought during the seventeenth and eighteenth centuries proposing that the way for a nation to become richer was to restrict imports and stimulate exports was:

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