Deck 8: International Trade

Question 1

Use the following to answer questions : $\text {Table: The Production Possibilities for Cars and Leather Boots}$
$\begin{array}{l}\hline \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Leather Boots }\\\begin{array}{lcc}{\text { Country }} & \text { Cars } & \text { (in thousands of pairs) } \\\hline \text { United States } & 80 & 40 \\\hline \text { Mexico } & 60 & 30 \\\hline\end{array}\end{array}$


-(Table: The Production Possibilities for Cars and Leather Boots)Use Table: The Production Possibilities for Cars and Leather Boots.The opportunity cost of producing one car in Mexico is:

A) 500 pairs of leather boots.
B) 1 000 pairs of leather boots.
C) different from the opportunity cost in Canada.
D) 2 000 pairs of leather boots,which is the same as in Canada.

Answer 1

500 pairs of leather boots.

Question 2

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

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.

Answer 3

a straight line.

Question 4

In a single year,the Netherlands can raise 100 tonnes of beef or produce 1 000 boxes of tulips.In the same growing season,Belgium can raise 50 tonnes of beef or produce 750 boxes of tulips.In autarky,the opportunity cost of 1 tonne of beef in the Netherlands is:

A) 100 tonnes of beef.
B) 1 000 boxes of tulips.
C) 10 boxes of tulips.
D) 0.1 box of tulips.

Question 5

As measured by a percentage of the entire economic output:

A) foreign trade is just as important for Canada as it is for most other countries.
B) foreign trade is more important for Canada than it is for most other countries.
C) foreign trade is less important for Canada than it is for many other countries.
D) Canada ranks highest in the world.

Question 6

Canada 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 7

Britain must give up the production of 75 hats to produce 25 additional sweaters.The opportunity cost of producing 3 hats is _____ sweater(s).

A) 1
B) 3
C) 22
D) 28

Question 8

The absolute value of the slope of the production possibility frontier at any point:

A) gives the autarky price of the good on the vertical axis.
B) is found by dividing the horizontal change by a vertical change.
C) gives the quantity of the good on the vertical axis that must be given up to produce an additional unit of the good on the horizontal axis.
D) gives the autarky price of the good on the horizontal axis relative to the autarky price of the good on the vertical axis.

Question 9

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 10

The _____ model analyzes trade under the assumption that opportunity costs are constant and therefore production possibility frontiers are straight lines.

A) pauper labour fallacy
B) Ricardian
C) Heckscher-Ohlin
D) oligopoly

Question 11

Goods and services purchased from abroad are _____,while goods and services sold abroad are _____.

A) exports;imports
B) imports;negative
C) exports;positive
D) imports;exports

Question 12

The term autarky refers to a situation when a country:

A) trades goods and services based on the principle of comparative advantage.
B) trades goods and services based on the principle of absolute advantage.
C) trades goods and services based on the principle of Ricardian advantage.
D) does not trade with other countries.

Question 13

France and England both produce wine and clothing with constant opportunity costs.France will have a comparative advantage in wine production if:

A) it can produce more wine than England.
B) its labour 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 14

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 15

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.

Question 16

In a single year,the Netherlands can raise 100 tonnes of beef or produce 1 000 boxes of tulips.In the same growing season,Belgium can raise 50 tonnes 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 17

France and England both produce wine and cloth with 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 18

In a single year,the Netherlands can raise 100 tonnes of beef or produce 1 000 boxes of tulips.In the same growing season,Belgium can raise 50 tonnes of beef or produce 750 boxes of tulips.In autarky,the opportunity cost 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.

Question 19

Canada 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 20

Use the following to answer questions : $\text {Table: The Production Possibilities for Cars and Leather Boots}$
$\begin{array}{l}\hline \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Leather Boots }\\\begin{array}{lcc}{\text { Country }} & \text { Cars } & \text { (in thousands of pairs) } \\\hline \text { United States } & 80 & 40 \\\hline \text { Mexico } & 60 & 30 \\\hline\end{array}\end{array}$


-(Table: The Production Possibilities for Cars and Leather Boots)Use Table: The Production Possibilities for Cars and Leather Boots.Given the opportunity costs of production:

A) there is no basis for trade.
B) Mexico should specialize in boots.
C) Canada should specialize in cars.
D) Canada should specialize in both goods,and Mexico should not produce either good.

Question 21

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180\end{array}\end{array}$$

-(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost in Mexico of producing 105 units of petroleum is _____ units of machinery.

A) 35
B) 70
C) 90
D) 160

Question 22

Canada 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 23

France and England both produce wine and cloth with 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 completely 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 24

If Japan 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 25

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180\end{array}\end{array}$$

-(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost of _____ is _____ in Canada as (than)in Mexico.

A) petroleum;less
B) petroleum;more
C) petroleum;the same
D) machinery;the same

Question 26

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180\end{array}\end{array}$$

-(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost in Mexico of producing 10 units of machinery is _____ units of petroleum.

A) 30
B) 90
C) 180
D) 270

Question 27

Japan must give up the production of 75 computers to produce 25 additional cellular telephones.The opportunity cost of producing 3 computers is _____ cell phone(s).

A) 1
B) 3
C) 22
D) 28

Question 28

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 29

Countries that engage in trade will tend to specialize in goods in which they have a(n)_____ and will _____ those goods.

A) comparative advantage;import
B) absolute advantage;export
C) comparative advantage;export
D) economic profit;import

Question 30

Lower wages in China reflect _____ labour productivity in China than in Canada.This means that if Canada moved high-tech industries to China,the overall cost of production would be _____ in China than in Canada.

A) lower;higher
B) lower;lower
C) higher;higher
D) higher;lower

Question 31

The belief that trade must be bad for exporting countries because the foreign workers are paid very low wages by our standards is the _____ fallacy.

A) pauper labour
B) sweatshop labour
C) third-world country
D) Nike

Question 32

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180\end{array}\end{array}$$

-(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.In Canada,the opportunity cost of producing 40 units of machinery is _____ units of petroleum.

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

Question 33

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180\end{array}\end{array}$$

-(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost of _____ is _____ in Canada as (than)in Mexico.

A) machinery;more
B) machinery;the same
C) machinery;less
D) petroleum;less

Question 34

According to the Heckscher-Ohlin model,Brazil will have a comparative advantage in oranges if the factors that are _____ in the production of oranges are _____.

A) intensive;abundant
B) intensive;imported
C) scarce;imported
D) intensive;inexpensive

Question 35

Saudi Arabia has a tremendous comparative advantage in petroleum.Which factor 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 36

Canada 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 statement is INCORRECT?

A) Canada should specialize in computer production.
B) Japan has the comparative advantage in car production.
C) There will be gains from trade if Canada exports computers to Japan.
D) Japan has an absolute advantage in car production.

Question 37

In a single year,the Netherlands can raise 100 tonnes of beef or produce 1 000 boxes of tulips.In the same growing season,Belgium can raise 50 tonnes of beef or produce 750 boxes of tulips.Trade will take place between these two countries if 1 tonne of beef costs _____ boxes of tulips.

A) 20
B) 5
C) 12
D) 8

Question 38

Canada must give up the production of 300 motorcycles to produce 15 additional SUVs with the same resources.The opportunity cost of producing 100 motorcycles is _____ SUV(s).

A) 1
B) 5
C) 7
D) 15

Question 39

If Canada can produce 30 computers for every car it produces and Japan can produce 15 computers for every car it produces,_____ has the _____ advantage in car production.

A) Canada;comparative
B) Japan;comparative
C) Canada;absolute
D) Japan;absolute

Question 40

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180\end{array}\end{array}$$

-(Table: Production Possibilities for Machinery and Petroleum)Use Table: Production Possibilities for Machinery and Petroleum.The opportunity cost in Canada of producing 30 units of petroleum is _____ units of machinery.

A) 60
B) 80
C) 100
D) 120

Question 41

Use the following to answer questions :
(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 kilograms of wheat,while Tahoe produces and consumes 80 head of cattle and 60 kilograms of wheat._____ has a(n)_____ advantage in the production of _____.

A) Jackson;comparative;cattle
B) Tahoe;comparative;wheat
C) Jackson;comparative;wheat
D) Jackson;absolute;cattle

Question 42

Chile has a comparative advantage over Canada in copper.Which factor 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 43

Japan's comparative advantage in automobiles can be attributed to:

A) climate.
B) factor endowments.
C) technology.
D) exchange rates.

Question 44

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 labour fallacy model
B) the Ricardian model
C) the Heckscher-Ohlin model
D) the oligopoly model

Question 45

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 defence

Question 46

Bangladesh exports shirts,the making of which is labour-intensive,to Canada.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 Canada,Bangladesh is a labour-abundant country.
D) the higher labour productivity in Bangladesh.

Question 47

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for the United States and Canada }\\\begin{array} { l c c } \hline \text { U.S. Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 10 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 10 \\\hline \text { Canada Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 2 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 12 \\\hline\end{array}\end{array}$$

-(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.If these nations were to specialize and trade,the United States would benefit from trade by exporting 1 million cars to Canada in exchange for _____ million board feet of lumber.

A) 2
B) 0.5
C) 0.7
D) 1

Question 48

Which trade pattern is BEST explained by increasing returns?

A) Honduras exports bananas to Canada,and Canada exports airplanes to Honduras.
B) Pakistan exports clothing to Canada,and Canada exports airplanes to Pakistan.
C) Japan exports cars to Canada,and Canada exports airplanes to Japan.
D) Mexico exports beef to Canada,and Canada exports airplanes to Mexico.

Question 49

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for the United States and Canada }\\\begin{array} { l c c } \hline \text { U.S. Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 10 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 10 \\\hline \text { Canada Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 2 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 12 \\\hline\end{array}\end{array}$$

-(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada._____ has/have an absolute advantage in producing cars.

A) Both the United States and Canada
B) Neither the United States nor Canada
C) The United States
D) Canada

Question 50

Sri Lanka's comparative advantage over Canada in textiles can be explained by its:

A) labour abundance.
B) mild climate.
C) advanced technology.
D) increasing returns.

Question 51

Both Canada and the United States produce automobiles and their components;however,each particular model or component is produced in only one of the two countries.Which factor 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 52

Use the following to answer questions :
(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 kilograms of wheat,while Tahoe produces and consumes 80 head of cattle and 60 kilograms of wheat.With complete specialization according to comparative advantage,the two nations' combined production of wheat will:

A) remain constant.
B) increase by 120 kilograms.
C) increase by 60 kilograms.
D) decrease by 60 kilograms.

Question 53

An urbanized country has 100 million workers living on 100 square kilometres of land.A country that is principally rural has 1 million workers living on 10 square kilometres of land.From this information,we know that the urbanized country is _____ relative to the rural country.

A) land-abundant
B) labour-abundant
C) land-intensive
D) labour-intensive

Question 54

Honduras exports clothing to Canada,and Canada 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 Canada has an advantage in the technology used in bulldozer production.
B) Honduras's climate is more conducive to producing clothing,while Canada's climate is more conducive to producing bulldozers.
C) Honduras has a relatively large endowment of factors of production for making clothing,while Canada has a relatively large endowment of factors of production for making bulldozers.
D) Honduras has a factor intensity in capital and Canada has a factor intensity in labour.

Question 55

China,which is labour-abundant,has a comparative advantage in clothing production,which is labour-intensive.Which model 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 56

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for the United States and Canada }\\\begin{array} { l c c } \hline \text { U.S. Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 10 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 10 \\\hline \text { Canada Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 2 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 12 \\\hline\end{array}\end{array}$$

-(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.If these nations trade,Canada has the comparative advantage in _____ and should trade _____ to the United States in exchange for _____.

A) cars;cars;lumber
B) lumber;lumber;cars
C) lumber;cars;lumber
D) cars;lumber;cars

Question 57

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for the United States and Canada }\\\begin{array} { l c c } \hline \text { U.S. Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 10 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 10 \\\hline \text { Canada Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 2 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 12 \\\hline\end{array}\end{array}$$

-(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada.Both nations can produce cars and lumber.In _____,the opportunity cost of _____ cars is _____ board feet of lumber.

A) the United States;1 million;10 million
B) the United States;10 million;1 million
C) Canada;1 million;6 million
D) Canada;1 million;166 000

Question 58

Mexico is relatively labour-abundant when compared with Canada.Therefore,Mexico has a comparative advantage in _____ compared with Canada.

A) all goods
B) goods that are labour-intensive in production
C) goods that are capital-intensive in production
D) goods that are land-intensive in production

Question 59

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for the United States and Canada }\\\begin{array} { l c c } \hline \text { U.S. Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 10 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 10 \\\hline \text { Canada Production Possibilities } & \text { One Possibility } & \text { Another Possibility } \\\hline \text { Quantity of Cars (millions) } & 2 & 0 \\\text { Quantity of Lumber (millions of board feet) } & 0 & 12 \\\hline\end{array}\end{array}$$

-(Table: Production Possibilities for the United States and Canada)Use Table: Production Possibilities for the United States and Canada._____ has/have an absolute advantage in producing lumber.

A) Both the United States and Canada
B) Neither the United States nor Canada
C) The United States
D) Canada

Question 60

Which statement does NOT describe a source of comparative advantage?

A) In general,France has absolute advantage over Italy in production of goods and services.
B) Canada's technology for computer chip design is more advanced than India's.
C) Hawaii has a more favourable climate to grow pineapple than does Italy.
D) In the market for lumber,Canada has many more trees than does England.

Question 61

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.In Mexico,the opportunity cost of producing 40 tractors is _____ barrels of crude oil.

A) 30 000
B) 90 000
C) 120 000
D) 270 000

Question 62

Use the following to answer questions :
(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 kilograms of wheat,while Tahoe produces and consumes 80 head of cattle and 60 kilograms of wheat.Each nation specializes completely,based on comparative advantage,and the price of 1 head of cattle equals the price of 2 kilograms of wheat.If Jackson exports 120 kilograms of wheat to Tahoe,then the new consumption point for Tahoe after trade is _____ kilograms of wheat and _____ head of cattle.

A) 120;140
B) 120;60
C) 60;120
D) 400;200

Question 63

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Both Canada and Mexico will gain from trade if one tractor trades for _____ barrels of oil.

A) 1 500
B) 4 500
C) 6 500
D) 8 500

Question 64

Use the following to answer questions :
(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.The opportunity cost of producing 1 tire in Indonesia is _____ microchip(s),while the opportunity cost of producing 1 tire in Malaysia is _____ microchip(s).

A) 0.5;2
B) 2;1
C) 600;800
D) 800;1 200

Question 65

Use the following to answer questions :
(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 kilograms of wheat,while Tahoe produces and consumes 80 head of cattle and 60 kilograms of wheat.If the two countries engage in international trade and specialize completely and if the price of 1 head of cattle equals the price of 2 kilograms 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 66

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Canada 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 67

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.In Canada,the opportunity cost of producing 40 tractors is _____ barrels of crude oil.

A) 80 000
B) 60 000
C) 40 000
D) 20 000

Question 68

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Which statement is TRUE?

A) The opportunity cost of crude oil is lower in Canada than in Mexico.
B) The opportunity cost of crude oil is higher in Canada than in Mexico.
C) Crude oil costs are the same in Canada and in Mexico.
D) Tractor costs are the same in Canada and in Mexico.

Question 69

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

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

Question 70

Use the following to answer questions :
(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.The opportunity cost of producing 1 microchip in Malaysia is _____ tire(s).

A) 0.5
B) 1
C) 2
D) 6

Question 71

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil._____ has/have an absolute advantage in producing tractors.

A) Canada
B) Mexico
C) Both Canada and Mexico
D) Neither Canada nor Mexico

Question 72

Use the following to answer questions :
(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.The opportunity cost of producing 1 microchip in Indonesia is _____ tire(s).

A) 0.5
B) 1
C) 2
D) 6

Question 73

Use the following to answer questions :
(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.Jackson has an absolute advantage in producing:

A) wheat only.
B) cattle only.
C) both wheat and cattle.
D) neither wheat nor cattle.

Question 74

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.In Canada,the opportunity cost of producing 30 000 barrels of crude oil is _____ tractors.

A) 60
B) 80
C) 100
D) 120

Question 75

Use the following to answer questions :
(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use 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 76

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.Both Canada and Mexico will gain from trade if one tractor trades for _____ barrels of crude oil.

A) 5 000
B) 4 000
C) 1 000
D) 200

Question 77

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.The opportunity cost of _____ is _____ in Canada as/than in Mexico.

A) tractors;higher
B) tractors;the same
C) tractors;lower
D) crude oil;lower

Question 78

Use the following to answer questions :
(Figure: The Production Possibility Frontiers for Jackson and Tahoe)Use Figure: The Production Possibility Frontiers for Jackson and Tahoe.In autarky,Jackson produces and consumes 30 head of cattle and 80 kilograms of wheat,while Tahoe produces and consumes 80 head of cattle and 60 kilograms of wheat.If both nations specialize completely in the good of their comparative advantage and Jackson exports 120 kilograms of wheat to Tahoe in exchange for 60 head of cattle,then the new consumption point for Jackson after trade is _____ kilograms of wheat and _____ head of cattle.

A) 120;30
B) 120;60
C) 80;60
D) 200;100

Question 79

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil.In Mexico,the opportunity cost of producing 150 000 barrels of crude oil is _____ tractors.

A) 50
B) 70
C) 90
D) 160

Question 80

Use the following to answer questions : $$\begin{array}{l}\text { Table: Production Possibilities for Machinery and Petroleum }\\\begin{array} { l c c } \hline \text { Country } & \begin{array} { c } \text { Machinery (M) } \\\text { (units) }\end{array} & \begin{array} { c } \text { Petroleum (P) } \\\text { (units) }\end{array} \\\hline \text { Canada } & 80 & 40 \\\text { Mexico } & 60 & 180 \\\hline\end{array}\end{array}$$

-(Table: The Production Possibilities for Tractors and Crude Oil)Use Table: The Production Possibilities for Tractors and Crude Oil._____ has/have an absolute advantage in producing crude oil.

A) Canada
B) Mexico
C) Both Canada and Mexico
D) Neither Canada nor Mexico