Deck 19: International Trade

Question 1

Use the following graph to answer the following questions:

What is the price of a car if this is a nontrading (closed)economy?

A) $6,000
B) $8,000
C) $10,000
D) $14,000
E) $24,000

Answer 1

$14,000

Question 2

The following table presents data on imports and exports as a percentage of gross domestic product (GDP)for select countries in 2015,based on data from the World Bank.Use the table to answer the following questions:

Based on data from the table,which countries had a trade deficit in 2015?

A) Australia,Chile,United States
B) Belgium,China,South Korea
C) Belgium,Chile,South Korea
D) Australia,China,United States
E) It is impossible to say because we need to know the dollar values of imports and exports.

Answer 2

Australia,Chile,United States

Question 3

Use the following graph to answer the following questions:


-In a trading (open)economy,how many TVs (in thousands)will this country import?

A) 30
B) 60
C) 90
D) 120
E) 150

Answer 3

60

Question 4

If St.John has a closed economy,it ________ with other countries.

A) trades all of its goods
B) does not trade goods
C) prevents its citizens from traveling to other countries,but trades goods
D) trades both services and goods
E) trades only services and no goods

Question 5

The following table presents data on imports and exports as a percentage of gross domestic product (GDP)for select countries in 2015,based on data from the World Bank.Use the table to answer the following questions:

Based on data from the table,which country had the largest trade deficit as a percentage of GDP in 2015?

A) Belgium
B) Chile
C) United States
D) South Korea
E) Australia

Question 6

An economy that does not trade with the rest of the world is a(n)________ economy.

A) open
B) command
C) trade
D) closed
E) one-person

Question 7

Trade surplus is

A) the sum of a nation's total exports and total imports.
B) the difference between a nation's total exports and total imports.
C) when a nation exports more than it imports.
D) when a nation imports more than it exports.
E) when a nation no longer feels it has the need for trade partners.

Question 8

For country A,an import is a good produced in

A) country B and purchased by residents of country A.
B) country A and purchased by residents of country A.
C) country A and purchased by residents of country B.
D) country B and purchased by residents of country B.
E) the domestic economy.

Question 9

Free trade is ________,because it ________ the size of the pie available to the economy.

A) inefficient; decreases
B) inefficient; increases
C) good for developed countries only; unfairly changes
D) efficient; decreases
E) efficient; increases

Question 10

An economy that trades with the rest of the world is a(n)________ economy.

A) open
B) command
C) trade
D) closed
E) autarky

Question 11

In the past decade,companies like Nike and Under Armour have set up manufacturing centers in Nicaragua in part due to the country's establishment of ________,allowing these companies to avoid standard corporate tax rates.

A) "trade zones"
B) "international zones"
C) "production zones"
D) "free zones"
E) "tax zones"

Question 12

Use the following graph to answer the following questions:

If this is a trading (open)economy,the price of a car will be

A) $6,000.
B) $8,000.
C) $10,000.
D) $14,000.
E) $24,000.

Question 13

Since 2000,world goods trade has

A) doubled.
B) tripled.
C) remained the same.
D) decreased by 10 percent.
E) decreased by 25 percent.

Question 14

Total world exports of goods and services are now about ________ the size of world GDP.

A) one-tenth
B) one-eighth
C) one-fourth
D) one-third
E) one-half

Question 15

Use the following graph to answer the following questions:

If this is a nontrading (closed)economy,how many cars (in thousands)will be exchanged?

A) 20
B) 40
C) 60
D) 80
E) 100

Question 16

The following table presents data on imports and exports as a percentage of gross domestic product (GDP)for select countries in 2015,based on data from the World Bank.Use the table to answer the following questions:

Suppose all countries in the world suddenly stop trading with each other.Which country in the table is likely to be the most negatively affected?

A) Belgium
B) Chile
C) United States
D) South Korea
E) Australia

Question 17

Trade deficit is

A) the sum of a nation's total exports and total imports.
B) the difference between a nation's total exports and total imports.
C) when a nation exports more than it imports.
D) when a nation imports more than it exports.
E) when a nation no longer feels it has the need for trade partners.

Question 18

If Hong Kong has an open economy,it ________ with other countries.

A) trades all of its goods
B) does not trade its goods
C) only trades a few of its goods
D) trades both services and goods
E) trades only services and no goods

Question 19

For country A,an export is a good produced in

A) country B and purchased by residents of country A.
B) country A and purchased by residents of country A.
C) country A and purchased by residents of country B.
D) country B and purchased by residents of country B.
E) any other country.

Question 20

Trade balance is

A) the sum of a nation's total exports and total imports.
B) the difference between a nation's total exports and total imports.
C) when a nation exports more than it imports.
D) when a nation imports more than it exports.
E) when a nation no longer feels it has the need for trade partners.

Question 21

The ability of one person or nation to produce more of a good while using the same quantity of resources as another is called a(n)________ advantage.

A) market
B) absolute
C) specialization
D) comparative
E) specific

Question 22

Citizens can consume the largest quantities of goods and services in which of the following situations?

A) autarky
B) closed economy
C) open economy
D) economy with few citizens
E) developed country

Question 23

Which country has the world's biggest economy?

A) Japan
B) Germany
C) United States
D) China
E) India

Question 24

The following table identifies the real value of exports,imports,and gross domestic product (GDP)for a country for three different years,measured in billions of dollars.Use the table to answer the following questions:

Based on the table,the value of exports ________,the value of imports ________,and the value of the trade balance ________.

A) increased; increased; increased
B) increased; increased; decreased
C) increased; decreased; increased
D) decreased; decreased; increased
E) increased; decreased; decreased

Question 25

The following table identifies the real value of exports,imports,and gross domestic product (GDP)for the U.S.economy,measured in billions of dollars for a series of years.Use the table to answer the following questions:

According to the table,across the 60-year period,the real value of exports ________ and the real value of exports as a percentage of GDP ________.

A) increased; decreased
B) increased; increased
C) increased; fluctuated up and down
D) decreased; increased
E) fluctuated up and down; fluctuated up and down

Question 26

In 2011,60 percent of goods imported by the United States came from just seven nations.Which of the following nations was one of those seven?

A) Australia
B) United Kingdom
C) Argentina
D) India
E) France

Question 27

For nearly four decades,the United States has had a

A) trade balance.
B) trade surplus.
C) trade deficit.
D) ban on imports.
E) ban on exports.

Question 28

The ability of one person or nation to produce a good at a lower opportunity cost than another is called a(n)________ advantage.

A) market
B) absolute
C) specialization
D) comparative
E) specific

Question 29

Which two countries buy the most U.S.exports?

A) China and Japan
B) China and Mexico
C) Canada and Mexico
D) Canada and Japan
E) Mexico and Japan

Question 30

Which of the following international organizations,founded in 1995,facilitates trade disputes between nations?

A) United Nations (UN)
B) North American Free Trade Agreement (NAFTA)
C) World Trade Organization (WTO)
D) European Union (EU)
E) Asia Pacific Economic Cooperation (APEC)

Question 31

Which of the following trade agreements caused trade between the United States,Canada,and Mexico to double?

A) World Trade Organization
B) Asia Pacific Economic Cooperation
C) North American Free Trade Agreement
D) European Union
E) Central America Free Trade Agreement

Question 32

The following table identifies the real value of exports,imports,and gross domestic product (GDP)for a country for three different years,measured in billions of dollars.Use the table to answer the following questions:

Based on the table,the value of exports as a percentage of GDP ________,and the value of imports as a percentage of GDP ________.

A) stayed the same; stayed the same
B) increased; decreased
C) decreased; increased
D) decreased; decreased
E) increased; increased

Question 33

The following table identifies the real value of exports,imports,and gross domestic product (GDP)for the U.S.economy,measured in billions of dollars for a series of years.Use the table to answer the following questions:

According to the table,across the 60-year period,the real value of imports ________ and the real value of imports as a percentage of GDP ________.

A) increased; decreased
B) increased; increased
C) increased; fluctuated up and down
D) decreased; increased
E) fluctuated up and down; fluctuated up and down

Question 34

The following table identifies the real value of exports,imports,and gross domestic product (GDP)for the U.S.economy,measured in billions of dollars for a series of years.Use the table to answer the following questions:

According to the table,in the year 2000,the real value of exports as a percentage of GDP was ________ and the real value of imports as a percentage of GDP was ________.

A) 12.48; 15.45
B) 5.43; 6.12
C) 8.79; 10.68
D) 10.02; 13.82
E) 2.00; 1.30

Question 35

In 2011,60 percent of goods imported by the United States came from just seven nations.Which of the following nations was NOT one of those seven?

A) Australia
B) South Korea
C) Japan
D) Mexico
E) Canada

Question 36

What does NAFTA stand for?

A) National Authorized Free Trade Agreement
B) North American Free Trade Agreement
C) North American Fair Trade Agreement
D) National Assembly for Free Trading Americas
E) National Authorized Free Trade Assembly

Question 37

In recent years,the United States has

A) exported more services abroad than it has imported.
B) imported more services from abroad than it has exported.
C) had a small goods trade surplus with Japan.
D) had a large goods trade surplus with the rest of the world.
E) fallen to third behind Japan and Germany in the list of leading export nations (absolute volume basis).

Question 38

The following table identifies the real value of exports,imports,and gross domestic product (GDP)for a country for three different years,measured in billions of dollars.Use the table to answer the following questions:

Based on the table,the value of exports __________ and the value of exports as a percentage of GDP __________.

A) increased; stayed the same
B) increased; increased
C) increased; decreased
D) decreased; increased
E) decreased; stayed the same

Question 39

If a society's consumption possibilities are identical to its production possibilities,that society has a(n)

A) closed economy.
B) open economy.
C) one-person economy.
D) absolute advantage in both goods and services.
E) free trade policy.

Question 40

Which of the following trade agreements is a binding agreement to reduce trade barriers between the United States and Mexico?

A) World Trade Organization
B) Asia Pacific Economic Cooperation
C) North American Free Trade Agreement
D) European Union
E) Central America Free Trade Agreement

Question 41

Use the following scenario to answer the following questions:
Suppose that Canada,an industrialized nation,and Mexico,a developing nation,both produce clothes and cars.The real wage in Mexico is lower than in Canada.The countries have a free trade agreement.Each nation will find a comparative advantage.
Which country's consumers will benefit from the free trade agreement?

A) neither country
B) Canada
C) both countries
D) Mexico
E) not enough information to determine

Question 42

Use the following scenario to answer the following questions:
Natasha can produce either 5,000 pounds of cheese or 20 houses per year.Jameson can produce either 5,000 pounds of cheese or 10 houses per year.
Natasha has a comparative advantage in the production of ________,and Jameson has a comparative advantage in the production of ________.

A) houses; houses
B) houses; cheese
C) cheese; houses
D) both goods; houses
E) both goods; cheese

Question 43

Use the following scenario to answer the following questions:
Natasha can produce either 5,000 pounds of cheese or 20 houses per year.Jameson can produce either 5,000 pounds of cheese or 10 houses per year.
If both Natasha and Jameson produce only cheese,how many pounds of cheese can they produce per year?

A) 2,500
B) 5,000
C) 7,500
D) 10,000
E) 12,500

Question 44

Use the following scenario to answer the following questions:
Esther and Ebenezer produce hamburgers and hot dogs.Esther can produce six hamburgers per hour or four hot dogs per hour.Ebenezer can produce three hamburgers per hour or one hot dog per hour.
Based on the scenario,Ebenezer's opportunity cost of one hot dog is ________ hamburgers.

A) three
B) one and a half
C) six
D) four
E) eight

Question 45

Florida's nice beaches and subtropical climate give the state ________ in tourism.

A) a comparative advantage
B) specialization
C) a trade benefit
D) higher income than all other states
E) self-sufficiency

Question 46

Use the following scenario to answer the following questions:
Esther and Ebenezer produce hamburgers and hot dogs.Esther can produce six hamburgers per hour or four hot dogs per hour.Ebenezer can produce three hamburgers per hour or one hot dog per hour.
Based on the scenario,Esther's opportunity cost of one hamburger is ________ hot dog(s).

A) two-thirds of a
B) one
C) six
D) four
E) eight

Question 47

Use the following scenario to answer the following questions:
Suppose that Canada,an industrialized nation,and Mexico,a developing nation,both produce clothes and cars.The real wage in Mexico is lower than in Canada.The countries have a free trade agreement.Each nation will find a comparative advantage.
Which country benefits from this free trade agreement?

A) Canada
B) Mexico
C) neither of them
D) both of them
E) not enough information to determine

Question 48

According to the principle of comparative advantage,trade between two countries will benefit

A) neither country.
B) the country with lower production costs.
C) the country with higher production costs.
D) both countries.
E) all workers.

Question 49

Use the following scenario to answer the following questions:
Natasha can produce either 5,000 pounds of cheese or 20 houses per year.Jameson can produce either 5,000 pounds of cheese or 10 houses per year.
Jameson's opportunity cost of producing one pound of cheese is ________ house(s).

A) 1/500 of a
B) 1/250 of a
C) 1/10 of a
D) 250
E) 500

Question 50

Use the following scenario to answer the following questions:
Esther and Ebenezer produce hamburgers and hot dogs.Esther can produce six hamburgers per hour or four hot dogs per hour.Ebenezer can produce three hamburgers per hour or one hot dog per hour.
Based on the scenario,Esther's opportunity cost of one hot dog is ________ hamburgers.

A) three
B) one and a half
C) six
D) four
E) eight

Question 51

Use the following scenario to answer the following questions:
Esther and Ebenezer produce hamburgers and hot dogs.Esther can produce six hamburgers per hour or four hot dogs per hour.Ebenezer can produce three hamburgers per hour or one hot dog per hour.
Based on the scenario,Ebenezer's opportunity cost of one hamburger is ________ hot dog(s).

A) one-third of a
B) one
C) six
D) four
E) eight

Question 52

The combination of goods and services that Mexico's citizens might feasibly consume is called Mexico's

A) total consumption.
B) total production.
C) consumption possibilities.
D) production possibilities.
E) national output.

Question 53

In general,a nation can enjoy a higher standard of living by ________ than by being self-sufficient.

A) increasing its versatility
B) avoiding trade with other nations
C) specializing and trading
D) taxing imported goods
E) producing on the PPF curve

Question 54

Use the following scenario to answer the following questions:
Natasha can produce either 5,000 pounds of cheese or 20 houses per year.Jameson can produce either 5,000 pounds of cheese or 10 houses per year.
Natasha's opportunity cost of producing one pound of cheese is ________ house(s).

A) 1/250 of a
B) 1/20 of a
C) 20
D) 250
E) 500

Question 55

An individual or country that has a comparative advantage in the production of one good

A) may or may not have an absolute advantage in the good's production.
B) must not have an absolute advantage in the production of the other good.
C) must not have an absolute advantage in the good's production.
D) must have an absolute advantage in the good's production.
E) must not have a specific advantage in the good's production.

Question 56

X has a comparative advantage over Y in producing a good if

A) X can produce more of the good than Y can in a given time period.
B) X has to trade off more than Y does to produce the good.
C) X has a lower opportunity cost of producing the good than does Y.
D) X has a higher opportunity cost of producing the good than does Y.
E) Y can produce more of the good than X can in a given time period.

Question 57

A society could achieve a higher level of productivity if

A) each person in the society is a jack-of-all-trades.
B) it takes advantage of each individual's comparative advantage.
C) it does not trade with other nations.
D) it does not tax imported goods.
E) it does not limit exports.

Question 58

Use the following scenario to answer the following questions:
Natasha can produce either 5,000 pounds of cheese or 20 houses per year.Jameson can produce either 5,000 pounds of cheese or 10 houses per year.
Jameson's opportunity cost of producing one house is ________ pound(s)of cheese.

A) 1/250 of a
B) 1/20 of a
C) 20
D) 250
E) 500

Question 59

A rich nation will trade with a poor nation (and vice versa)because the

A) rich nation has a comparative advantage in all products.
B) poor nation has an absolute advantage in all products.
C) rich nation has an absolute advantage in all products.
D) poor nation has a comparative advantage in a product.
E) poor nation does not have any comparative advantage.

Question 60

Use the following scenario to answer the following questions:
Natasha can produce either 5,000 pounds of cheese or 20 houses per year.Jameson can produce either 5,000 pounds of cheese or 10 houses per year.

-Natasha's opportunity cost of producing one house is ________ pound(s)of cheese.

A) 1/250 of a
B) 1/20 of a
C) 20
D) 250
E) 500

Question 61

By the principle of comparative advantage,Jameson should specialize in producing

A) both cheese and houses.
B) cheese.
C) houses.
D) neither cheese nor houses.
E) a little of both goods.

Question 62

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Jager's opportunity cost of one truck is ________ car(s).

A) three-quarters of a
B) one and a third
C) three
D) four
E) six

Question 63

Use the following scenario to answer the following questions:
Rosa and Dirk produce basketballs and footballs.Rosa can produce six basketballs per hour or two footballs per hour.Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Dirk's opportunity cost of one football is ________ basketball(s).

A) three-quarters of a
B) one and a third
C) three
D) four
E) six

Question 64

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,which of the following is true?

A) Karl has both an absolute and a comparative advantage in car production.
B) Karl has both an absolute and a comparative advantage in truck production.
C) Karl has neither an absolute nor a comparative advantage in car production.
D) Karl has neither an absolute nor a comparative advantage in truck production.
E) Jager has both an absolute and a comparative advantage in truck production.

Question 65

Use the following scenario to answer the following questions:
Rosa and Dirk produce basketballs and footballs.Rosa can produce six basketballs per hour or two footballs per hour.Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Dirk's opportunity cost of one basketball is ________ football(s).

A) one and a third
B) one
C) three-quarters of a
D) four
E) three

Question 66

If both Natasha and Jameson produce the good for which each has a comparative advantage,total output of this economy will be

A) 10,000 pounds of cheese.
B) 30 houses.
C) 10,000 pounds of cheese and 30 houses.
D) 5,000 pounds of cheese.
E) 5,000 pounds of cheese and 20 houses.

Question 67

Use the following scenario to answer the following questions:
Rosa and Dirk produce basketballs and footballs.Rosa can produce six basketballs per hour or two footballs per hour.Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Rosa has

A) an absolute advantage in producing basketballs,but not footballs.
B) an absolute advantage in producing footballs,but not basketballs.
C) an absolute advantage in producing both goods.
D) an absolute advantage in producing neither good.
E) no comparative advantage.

Question 68

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Karl's opportunity cost of one truck is ________ cars.

A) four
B) one and a half
C) two
D) three
E) eight

Question 69

Use the following scenario to answer the following questions:
Rosa and Dirk produce basketballs and footballs.Rosa can produce six basketballs per hour or two footballs per hour.Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Rosa's opportunity cost of one basketball is ________ football(s).

A) one-third of a
B) one
C) six
D) four
E) eight

Question 70

If this economy produces more than 20 houses per year,the opportunity cost of a house will ________ because ________.

A) decrease; production will be specialized
B) increase; an input with a higher opportunity cost must be used
C) decrease; inputs will be obtained at lower cost
D) increase; all gains from trade have already been exploited
E) remain the same; Natasha and Jameson produce in constant ratios regardless of level of output

Question 71

Use the following scenario to answer the following questions:
Rosa and Dirk produce basketballs and footballs.Rosa can produce six basketballs per hour or two footballs per hour.Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Rosa has

A) a comparative advantage in producing basketballs,but not footballs.
B) a comparative advantage in producing footballs,but not basketballs.
C) a comparative advantage in producing both goods.
D) a comparative advantage in producing neither good.
E) no absolute advantage.

Question 72

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.

-Based on the scenario,Karl has

A) an absolute advantage in producing cars,but not trucks.
B) an absolute advantage in producing trucks,but not cars.
C) an absolute advantage in producing both goods.
D) an absolute advantage in producing neither good.
E) no comparative advantage.

Question 73

Use the following scenario to answer the following questions:
Rosa and Dirk produce basketballs and footballs.Rosa can produce six basketballs per hour or two footballs per hour.Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,Rosa's opportunity cost of one football is ________ basketballs.

A) four
B) one and a half
C) six
D) three
E) eight

Question 74

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Karl has

A) a comparative advantage in producing cars,but not trucks.
B) a comparative advantage in producing trucks,but not cars.
C) a comparative advantage in producing both goods.
D) a comparative advantage in producing neither good.
E) no absolute advantage.

Question 75

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,which of the following is true?

A) Jager has an absolute advantage in producing cars,but not trucks.
B) Jager has an absolute advantage in producing trucks,but not cars.
C) Jager has an absolute advantage in producing both goods.
D) Jager has an absolute advantage in producing neither good.
E) Karl has a comparative advantage in producing both goods.

Question 76

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Karl's opportunity cost of one car is ________ truck(s).

A) one-quarter of a
B) one-half of a
C) two
D) four
E) six

Question 77

Use the following scenario to answer the following questions:
Karl and Jager produce cars and trucks.Karl can produce 10 cars per hour or 5 trucks per hour.Jager can produce 12 cars per hour or 4 trucks per hour.
Based on the scenario,Jager's opportunity cost of one car is ________ truck(s).

A) two-thirds of a
B) one-third of a
C) three-quarters of a
D) four
E) three

Question 78

Use the following scenario to answer the following questions:
Rosa and Dirk produce basketballs and footballs.Rosa can produce six basketballs per hour or two footballs per hour.Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,which of the following is true?

A) Dirk has an absolute advantage in producing basketballs,but not footballs.
B) Dirk has an absolute advantage in producing footballs,but not basketballs.
C) Dirk has an absolute advantage in producing both goods.
D) Dirk has an absolute advantage in producing neither good.
E) Rosa has a comparative advantage in producing both goods.

Question 79

Use the following scenario to answer the following questions:
Rosa and Dirk produce basketballs and footballs.Rosa can produce six basketballs per hour or two footballs per hour.Dirk can produce three basketballs per hour or four footballs per hour.
Based on the scenario,which of the following is true?

A) Rosa has both an absolute and a comparative advantage in basketball production.
B) Rosa has both an absolute and a comparative advantage in football production.
C) Rosa has neither an absolute nor a comparative advantage in basketball production.
D) Rosa has neither an absolute nor a comparative advantage in football production.
E) Dirk has both an absolute and a comparative advantage in basketball production.

Question 80

By the principle of comparative advantage,Natasha should specialize in producing

A) both cheese and houses.
B) cheese.
C) houses.
D) neither cheese nor houses.
E) a little of both goods.