Deck 8: International Trade

Question 1

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips.In autarky the price of beef:
A.is higher in the Netherlands than in Belgium.
B.is lower in the Netherlands than in Belgium.
C.is the same in the Netherlands as in Belgium.
D.cannot be determined in either country.

Answer 1

is lower in the Netherlands than in Belgium.

Question 2

At the point at which it is currently producing, Britain must give up the production of 75 hats to produce 25 additional sweaters.The opportunity cost of producing 4 sweaters is hats.
A.4
B.12
C.71
D.79

Answer 2

12

Question 3

On a production possibility frontier, opportunity cost is:
A.the decrease in the output of one good when the output of the other good is increased.
B.the rate at which people are willing to exchange goods as determined by demand and supply.
C.the dollar cost of the good given up to get another good.
D.independent of the slope of the curve.

Answer 3

the decrease in the output of one good when the output of the other good is increased.

Question 4

Which of the following is true of the trends for imports and exports (as measured by a percentage of the entire economy) in the United States?
A.Imports and exports have both been increasing.
B.Imports and exports have both been decreasing.
C.Imports have been increasing and exports have been decreasing.
D.Imports have been decreasing and exports have been increasing.

Question 5

Goods and services purchased from abroad are ; goods and services sold abroad are
________.
A.imports; exports
B.tariffs; import quotas
C.exports; imports
D.import quotas; tariffs

Question 6

France and England both produce wine and clothing under conditions of constant opportunity costs.France will have a comparative advantage in wine production if:
A.it can produce more wine than England.
B.its labor productivity in wine production is greater than England's.
C.the absolute cost of producing wine is lower in France than in England.
D.the opportunity cost of wine production is lower in France than in England.

Question 7

(Table: The Production Possibilities for Cars and Leather Boots) Look at the table The Production Possibilities for Cars and Leather Boots.The opportunity cost of producing one car in Canada is:
A.0.5 (thousand) leather boots.
B.1 (thousand) leather boots.
C.different than it is in the United States.
D.2 (thousand) leather boots, which is the same as in the United States.

Question 8

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips.In
autarky, the price of one ton of beef in the Netherlands is:
A.100 tons of beef.
B.1,000 boxes of tulips.
C.10 boxes of tulips.
D.0.1 box of tulips.

Question 9

At the point at which it is currently producing, Britain must give up the production of 75 hats to produce 25 additional sweaters.The opportunity cost of producing 3 hats is sweaters.
A.1
B.3
C.22
D.28

Question 10

Goods and services purchased from abroad are , while goods and services sold abroad
are _.
A.exports; imports
B.imports; exports
C.exports; quotas
D.quotas; factors

Question 11

The absolute value of the slope of the production possibility frontier at any point:
A.gives the price of the good on the vertical axis that must be given up to attain an additional unit of the good on the horizontal axis.
B.is found by dividing the horizontal change by a vertical change.
C.gives on the vertical axis the quantity of the good that must be given up to produce an additional unit of the good on the horizontal axis.
D.gives on the horizontal axis the price of the good relative to the price of the good on the vertical axis.

Question 12

Over the past 40 years in the United States, as a percentage of gross domestic product:
A.exports have grown and imports have remained constant.
B.imports have grown and exports have remained constant.
C.exports have decreased.
D.exports and imports have grown.

Question 13

(Table: The Production Possibilities for Cars and Leather Boots) Look at the table The Production Possibilities for Cars and Leather Boots.Given the opportunity costs of production:
A.there is no basis for trade.
B.Canada should specialize in boots.
C.the United States should specialize in cars.
D.the United States should specialize in both goods, and Canada should not produce either good.

Question 14

France and England both produce wine and cloth under conditions of constant opportunity costs.France can produce 150 barrels of wine if it produces no cloth or 100 bolts of cloth if it produces no wine.England can produce 50 barrels of wine if it produces no cloth or 100 bolts of cloth if it produces no wine.Using this information, we can conclude that:
A.France has a comparative advantage in cloth production.
B.England has a comparative advantage in cloth production.
C.France has a comparative advantage in both goods.
D.mutually beneficial international trade is not possible.

Question 15

At the point at which it is currently producing, the United States must give up the production of 500 bicycles to produce 20 additional tractors.The opportunity cost of producing 5 tractors is
________ bicycles.
A.5
B.20
C.100
D.125

Question 16

In a Ricardian model of international trade, the production possibility frontiers are ,
indicating that the opportunity cost of increasing the production of one item relative to another
________.
A.convex; is constant
B.concave; increases
C.straight lines; is constant
D.straight lines; decreases

Question 17

The analyzes trade under the assumption that opportunity costs are constant and
therefore production possibility frontiers are straight lines.
A.pauper labor fallacy model
B.Ricardian model
C.Heckscher-Ohlin model
D.oligopoly model

Question 18

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips.From this information, we know that:
A.the Netherlands has a comparative advantage in raising beef.
B.the Netherlands has a comparative advantage in raising tulips.
C.Belgium has a comparative advantage in raising beef.
D.Belgium has an absolute advantage in raising beef.

Question 19

Production possibility frontiers:
A.illustrate the production choices available to an economy.
B.assume full employment but not maximum efficiency.
C.assume maximum efficiency but not full employment.
D.are used to illustrate the law of decreasing opportunity costs.

Question 20

At the point at which it is currently producing, the United States must give up the production of 500 bicycles to produce 20 additional tractors.The opportunity cost of producing 100 bicycles is
________ tractor(s).
A.1
B.4
C.25
D.100

Question 21

France and England both produce wine and cloth under conditions of constant opportunity costs.France can produce 150 barrels of wine if it produces no cloth or 100 bolts of cloth if it produces no wine.England can produce 50 barrels of wine if it produces no cloth or 150 bolts of cloth if it produces no wine.When international trade takes place, each country specializes in the production of the good in which it has a comparative advantage-1 barrel of wine exchanges for 1 bolt of cloth-and France exports 50 units of wine.We can conclude that France produces ________
units of wine and ________ units of cloth and that France consumes units of wine and
________ units of cloth.
A.150; 100; 100; 100
B.150; 0; 100; 50
C.150; 0; 50; 50
D.0; 100; 50; 50

Question 22

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips.In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips.At which of these prices will trade occur between the two countries?
A.One ton of beef costs 20 boxes of tulips.
B.One ton of beef costs 5 boxes of tulips.
C.One ton of beef costs 12 boxes of tulips.
D.One ton of beef costs 8 boxes of tulips.

Question 23

The United States, at the point where it is currently producing, must give up the production of 300 motorcycles to produce 20 additional SUVs with the same resources.In this case, the opportunity cost of producing 5 SUVs is motorcycles.
A.5
B.20
C.100
D.75

Question 24

If the United States can produce 30 computers for every car it produces and Japan can produce 15 computers for every car it produces, we can conclude that:
A.the United States has the comparative advantage in car production.
B.Japan has the comparative advantage in car production.
C.the United States has the absolute advantage in car production.
D.Japan has the absolute advantage in car production.

Question 25

If Japan, at the point where it is currently producing, must give up the production of 75 computers to produce 25 additional cellular telephones, the opportunity cost of producing 4 cellular telephones is
________ computers.
A.4
B.12
C.71
D.79

Question 26

Saudi Arabia has a tremendous comparative advantage in petroleum.Which of the following is a source of this comparative advantage?
A.mild temperatures
B.large reserves of crude oil
C.no opportunity cost associated with oil production
D.high tariffs on oil from other nations

Question 27

(Table: Production Possibilities for Machinery and Petroleum) Look at the table Production Possibilities for Machinery and Petroleum.The table shows the number of units of machinery each country would have to forgo in order to produce additional petroleum, assuming constant costs at its current levels of production.Based on the information in the table, it is true that:
A.the opportunity cost of petroleum is less in the United States than in Mexico.
B.the opportunity cost of petroleum is more in the United States than in Mexico.
C.petroleum costs are the same in the United States and in Mexico.
D.machinery costs are the same in the United States and in Mexico.

Question 28

Japan, at the point at which it is currently producing, must give up the production of 75 computers to produce 25 additional cellular telephones.Which of the following is the opportunity cost of producing 3 computers?
A.1 cellular telephone
B.3 cellular telephones
C.22 cellular telephones
D.28 cellular telephones

Question 29

The term autarky refers to a situation in which a country:
A.trades goods and services based upon the principle of comparative advantage.
B.trades goods and services based upon the principle of absolute advantage.
C.trades goods and services based upon the principle of Ricardian advantage.
D.does not trade with other countries.

Question 30

(Table: Production Possibilities for Machinery and Petroleum) Look at the table Production Possibilities for Machinery and Petroleum.The table shows the number of units of machinery each country would have to forgo in order to produce additional petroleum, assuming constant costs at all levels of production.The opportunity cost in Mexico of producing 105 units of petroleum is
________ units of machinery.
A.35
B.70
C.90
D.160

Question 31

(Table: Production Possibilities for Machinery and Petroleum) Look at the table Production Possibilities for Machinery and Petroleum.The table shows the number of units of machinery each country would have to forgo in order to produce additional petroleum, assuming constant costs at all levels of production.The opportunity cost in the United States of producing 40 units of machinery is
________ units of petroleum.
A.80
B.60
C.40
D.20

Question 32

(Table: Production Possibilities for Machinery and Petroleum) Look at the table Production Possibilities for Machinery and Petroleum.The table shows the number of units of machinery each country would have to forgo in order to produce additional petroleum assuming constant costs at all levels of production.The opportunity cost in Mexico of producing 10 units of machinery is
________ units of petroleum.
A.30
B.90
C.180
D.270

Question 33

The belief that trade must be bad for exporting countries because those workers are paid very low wages by our standards is the:
A.pauper labor fallacy.
B.sweatshop labor fallacy.
C.third-world country
D.fallacy.Nike fallacy.

Question 34

(Table: Production Possibilities for Machinery and Petroleum) Look at the table Production Possibilities for Machinery and Petroleum.The table shows the number of units of machinery each country would have to forgo in order to produce additional petroleum, assuming constant costs at all levels of production.The opportunity cost in the United States of producing 30 units of petroleum is
________ units of machinery.
A.60
B.80
C.100
D.120

Question 35

(Table: Production Possibilities for Machinery and Petroleum) Look at the table Production Possibilities for Machinery and Petroleum.The table shows the number of units of machinery each country would have to forgo in order to produce additional petroleum, assuming constant costs at its current level of production.Based on the information in the table, it is true that:
A.the opportunity cost of machinery is more in the United States than in Mexico.
B.machinery costs are the same in the United States and in Mexico.
C.the opportunity cost of machinery is less in the United States than in Mexico.
D.the opportunity cost of petroleum is less in the United States than in Mexico.

Question 36

The United States can produce 30 computers for every car it produces, and Japan can produce 15 computers for every car it produces.Based on this information, which of the following statements is incorrect?
A.The United States should specialize in computer production.
B.Japan has the comparative advantage in car production.
C.There will be gains from trade if the United States exports computers to Japan.
D.Japan has an absolute advantage in car production.

Question 37

Countries that engage in trade will tend to specialize in goods in which they have and will
________ those goods.
A.a comparative advantage; import
B.an absolute advantage; export
C.a comparative advantage; export
D.an economic profit; import

Question 38

The United States, at the point where it is currently producing, must give up the production of 300 motorcycles to produce 15 additional SUVs with the same resources.Which of the following is the opportunity cost of producing 100 motorcycles?
A.1 SUV
B.5 SUVs
C.7 SUVs
D.15 SUVs

Question 39

If the opportunity costs of production are constant, then the production possibility frontier is:
A.bowed out from the origin.
B.bowed in toward the origin.
C.a straight line.
D.circular.

Question 40

Taken collectively, people in nations that engage in international trade are not likely to:
A.consume more than they were able to consume in the absence of trade.
B.raise their standards of living.
C.gain from lower opportunity costs of production.
D.be made worse off.

Question 41

Which of the following trade patterns is best explained by increasing returns?
A.Honduras exports bananas to the United States and the United States exports airplanes to Honduras.
B.Pakistan exports clothing to the United States and the United States exports airplanes to Pakistan.
C.Japan exports cars to the United States and the United States exports airplanes to Japan.
D.Mexico exports beef to the United States and the United States exports airplanes to Mexico.

Question 42

Bangladesh exports shirts, the making of which is labor-intensive, to the United States.The likely source of Bangladesh's comparative advantage in shirts is:
A.a hotter climate, which makes it possible to produce shirts outdoors, eliminating the need for factory buildings and hence reducing costs.
B.superior production technology.
C.that in comparison with the United States, Bangladesh is a labor-abundant country.
D.the higher labor productivity in Bangladesh.

Question 43

The Leontief paradox is the surprising discovery by the economist Wassily Leontief in 1951 that:
A.U.S.exports were less capital-intensive than U.S.imports.
B.the value of U.S.exports and imports was much lower than the corresponding value for other industrialized countries.
C.U.S.imports were growing much faster than U.S.exports.
D.exports and imports for most European countries were growing much faster than U.S.exports and imports, even though the United States placed fewer restrictions on international trade.

Question 44

If the differ(s) between two countries, this suggests the possibility for mutually
advantageous trade.
A.currency
B.factor endowments
C.exchange rate
D.level of government spending for defense

Question 45

Which is not a source of comparative advantage?
A.In general, France has absolute advantage in production of all goods and services when compared to Italy.
B.The United States has more advanced technology for computer chip design than India.
C.Hawaii has a more favorable climate to grow pineapple than Italy.
D.In the market for lumber, Canada has many more trees than England.

Question 46

Honduras exports clothing to the United States, and the United States exports bulldozers to Honduras.Proponents of the Heckscher-Ohlin model would explain this pattern of trade by stating that:
A.Honduras has an advantage in the technology used in clothing production, while the United States has an advantage in the technology used in bulldozer production.
B.Honduras has a climate that is more conducive to producing clothing, while the United States has a climate more conducive to producing bulldozers.
C.Honduras has a relatively larger endowment of factors of production that are suited to making clothing, while the United States has a relatively larger endowment of factors of production that are suited to making bulldozers.
D.Honduras has a factor intensity in capital and the United States has a factor intensity in labor.

Question 47

(Table: Production Possibilities for the United States and Canada) Look at the table Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.If these nations were to trade, which of the following is true?
A.Canada has the comparative advantage in cars and should trade cars to the United States in exchange for lumber.
B.Canada has the comparative advantage in lumber and should trade lumber to the United States in exchange for cars.
C.Canada has the comparative advantage in lumber and should trade cars to the United States in exchange for lumber.
D.Canada has the comparative advantage in cars and should trade lumber to the United States in exchange for cars.

Question 48

(Table: Production Possibilities for the United States and Canada) Look at the table Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.Based on the table, which of the following is true?
A.In the United States, the opportunity cost of 1 million cars is 10 million board feet of lumber.
B.In the United States, the opportunity cost of 10 million cars is 1 million board feet of lumber.
C.In Canada, the opportunity cost of 1 million cars is 6 million board feet of lumber.
D.In Canada, the opportunity cost of 1 million cars is 1/6 million board feet of lumber.

Question 49

An urbanized country has 100 million workers living on 100 square miles of land.A country that is principally rural has 1 million workers living on 10 square miles of land.From this information we know that the urbanized country is relative to the rural country.
A.land-abundant
B.labor-abundant
C.land-intensive
D.labor-intensive

Question 50

(Table: Production Possibilities for the United States and Canada) Based on the production possibilities for the United States and Canada, which of the following is true?
A.Both the United States and Canada have an absolute advantage in producing cars.
B.Neither the United States nor Canada has an absolute advantage in producing cars.
C.The United States has an absolute advantage in producing cars.
D.Canada has an absolute advantage in producing cars.

Question 51

Mexico is relatively labor-abundant when compared with the United States.Therefore, Mexico has a comparative advantage in compared with the United States.
A.all goods
B.goods that are labor-intensive in production
C.goods that are capital-intensive in production
D.goods that are land-intensive in production

Question 52

Chile has a comparative advantage over the United States in copper.Which of the following is a source of this comparative advantage?
A.mild temperatures
B.large deposits of copper ore
C.no opportunity cost associated with copper production
D.high tariffs on copper from other nations

Question 53

Which model states that nations that are abundant in a factor will have a comparative advantage in a good whose production is intensive in that factor?
A.the pauper labor fallacy model.
B.the Ricardian model
C.the Heckscher-Ohlin model
D.the oligopoly model

Question 54

China, which is labor-abundant, has a comparative advantage in clothing production, which is labor- intensive.Which of the following models explains this pattern of comparative advantage?
A.the Ricardian model
B.a model of increasing returns
C.the Heckscher-Ohlin model
D..a model of autarky

Question 55

Both the United States and Canada produce automobiles and their components; however, each particular model or component is produced in only one of the two countries.Which of the following explains this pattern of production and trade?
A.differences in climate
B.differences in factor endowments
C.differences in technology
D.the role of increasing returns

Question 56

Lower wages in China reflect labor productivity in China than in the United States.This
means that if the United States moved high-tech industries to China, the overall cost of production would be in China than in the United States.
A.lower; higher
B.lower; lower
C.higher; higher
D.higher; lower

Question 57

According to the Heckscher-Ohlin model, Brazil will have a comparative advantage in oranges if the factors ________ in the production of oranges are _.
A.intensive; abundantly available
B.intensive; imported from other nations
C.that are scarce; imported from other nations
D.intensive; inexpensive

Question 58

Sri Lanka's comparative advantage over the United States in textiles can be explained by its:
A.labor abundance.
B.mild climate.
C.advanced technology.
D.increasing returns.

Question 59

(Table: Production Possibilities for the United States and Canada) Look at the table Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.If these nations were to specialize and trade, which of the following is a potential agreement that would benefit both nations?
A.The United States would export 1 million cars to Canada in exchange for 2 million board feet of lumber.
B.The United States would export 1 million cars to Canada in exchange for 0.5 million board feet of lumber.
C.The United States would export 1 million cars to Canada in exchange for 8 million board feet of lumber.
D.The United States would export 1 million cars to Canada in exchange for 1 million board feet of lumber.

Question 60

Japan's comparative advantage in automobiles can be attributed to:
A.climate.
B.factor endowments.
C.technology.
D.exchange rates.

Question 61

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.Both the United States and Mexico will gain from trade if one tractor trades for (thousand) barrels of oil.

A)1.5
B)4.5
C)6.5
D)8.5

Question 62

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.The United States has a comparative advantage in
________ and Mexico has a comparative advantage in _.
A.both goods; neither good
B.neither good; both goods
C.tractors; crude oil
D.crude oil; tractors

Question 63

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.The opportunity cost in the United States of producing 30 (thousand) barrels of crude oil is tractors.
A.60
B.80
C.100
D.120

Question 64

Figure: The Production Possibility Frontiers for Jackson and Tahoe
(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe.In autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.If the two countries engage in international trade and the price of 1 head of cattle equals 2 bushels of wheat, world production of cattle will:
A.remain constant.
B.increase by 90 head.
C.increase by 120 head.
D.decrease by 30 head.

Question 65

Figure: The Production Possibility Frontiers for Jackson and Tahoe
(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe.In autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.Each nation specializes completely, based on comparative
advantage, and the price of 1 head of cattle equals 2 bushels of wheat.If Jackson exports 120 bushels of wheat to Tahoe, then the new consumption point for Tahoe after trade is ________
bushels of wheat and head of cattle.
A.120; 140
B.120; 60
C.60; 120
D.400; 200

Question 66

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.Which of the following is true?
A.The opportunity cost of tractors is higher in the United States than in Mexico.
B.The opportunity cost of tractors is the same in the United States and in Mexico.
C.The opportunity cost of tractors is lower in the United States than in Mexico.
D.The opportunity cost of crude oil is lower in the United States than in Mexico.

Question 67

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.Which of the following is true?
A.The opportunity cost of crude oil is lower in the United States than in Mexico.
B.The opportunity cost of crude oil is higher in the United States than in Mexico.
C.Crude oil costs are the same in the United States and in Mexico.
D.Tractor costs are the same in the United States and in Mexico.

Question 68

Figure: The Production Possibility Frontiers for Jackson and Tahoe
(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe.In autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.If both nations specialize completely in the good of their comparative advantage and Jackson exports 120 bushels of wheat to Tahoe in exchange for 60 head of cattle, then the new consumption point for Jackson after trade is bushels of
wheat and head of cattle.
A.120; 30
B.120; 60
C.80; 60
D.200; 100

Question 69

(Table: The Production Possibilities for Tractors and Crude Oil) Based on the production possibilities for the United States and Mexico, which of the following is true?
A.The United States has an absolute advantage in producing tractors.
B.Mexico has an absolute advantage in producing tractors.
C.Both the United States and Mexico have an absolute advantage in producing tractors.
D.Neither the United States nor Mexico has an absolute advantage in producing tractors.

Question 70

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.The opportunity cost in Mexico of producing 150 (thousand) barrels of crude oil is tractors.
A.50
B.70
C.90
D.160

Question 71

(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe.Tahoe has an absolute advantage in producing
A.wheat only.
B.cattle only.
C.both wheat and cattle.
D.neither wheat nor cattle.

Question 72

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.The opportunity cost in the United States of producing 40 tractors is (thousand) barrels of crude oil.
A.80
B.60
C.40
D.20

Question 73

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.Both the United States and Mexico will gain from trade if one tractor trades for (thousand) barrels of crude oil.

A)5
B)4
C)1
D)0.2

Question 74

(Table: Production Possibilities for the United States and Canada) Based on the production possibilities for the United States and Canada, which of the following is true?
A.Both the United States and Canada have an absolute advantage in producing lumber.
B.Neither the United States nor Canada has an absolute advantage in producing lumber.
C.The United States has an absolute advantage in producing lumber.
D.Canada has an absolute advantage in producing lumber.

Question 75

Figure: The Production Possibility Frontiers for Jackson and Tahoe
(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe.In autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.Based on this information:
A.Jackson has a comparative advantage in the production of cattle.
B.Tahoe has a comparative advantage in the production of wheat.
C.Jackson has a comparative advantage in the production of wheat.
D.Jackson has an absolute advantage in the production of wheat.

Question 76

Figure: The Production Possibilities for Two Countries
(Figure: The Production Possibilities for Two Countries) Look at the figure The Production Possibilities for Two Countries.The opportunity cost of producing 1 tire in Indonesia is ________
radio(s), while the opportunity cost of producing 1 tire in Malaysia is radio(s).
A.1/2; 2
B.2; 1
C.600; 800
D.800; 1,200

Question 77

(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil.The opportunity cost in Mexico of producing 40 tractors is
________ (thousand) barrels of crude oil.
A.30
B.90
C.120
D.270

Question 78

Figure: The Production Possibility Frontiers for Jackson and Tahoe
(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe.In autarky, Jackson produces and consumes 30 head of cattle and 80 barrels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.With complete specialization according to comparative advantage, the two nations' production of wheat will:
A.remain constant.
B.increase by 120 bushels.
C.increase by 60 bushels.
D.decrease by 60 bushels.

Question 79

(Table: The Production Possibilities for Tractors and Crude Oil) Based on the production possibilities for the United States and Mexico, which of the following is true?
A.The United States has an absolute advantage in producing crude oil.
B.Mexico has an absolute advantage in producing crude oil.
C.Both the United States and Mexico have an absolute advantage in producing crude oil.
D.Neither the United States nor Mexico has an absolute advantage in producing crude oil.

Question 80

Figure: The Production Possibility Frontiers for Jackson and Tahoe (Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe.In autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat.Assume each nation specializes completely, based on comparative advantage, and the price of 1 head of cattle equals 2 bushels of wheat.If Jackson exports 120 bushels of wheat to Tahoe, Tahoe will export head of cattle to Jackson.

A)120
B)60
C)240
D)200