Question 1

If Estonia has an absolute advantage in the production of two goods compared to Norway, Estonia can not benefit from trade with Norway.

Accepted Answer

A) True 
 B)False

Question 2

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
  
Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Denmark gain compared to the "without trade" numbers?

Accepted Answer

A) 30 
B) 100 
C) 150 
D) 900

Question 3

Table 9-5
  
Table 9-5 shows the output per week for bows and arrows by Ahmet and MyLinh.
-Refer to Table 9-5.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh.

Accepted Answer

The answer of Table 9-5
  
Table 9-5 shows the...

Question 4

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
  
Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.Which country has a comparative advantage in producing hats?

Accepted Answer

A) Denmark 
B) Belize 
C) both countries 
D) neither country

Question 5

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
  
Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.Which country has a comparative advantage in producing clocks?

Accepted Answer

A) Denmark 
B) Belize 
C) both countries 
D) neither country

Question 6

Table 9-3
  
Bryce and Tina are artisans who produce homemade candles and soap.Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 9-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Bryce has an absolute advantage in making candles and soap. 
B) Tina has an absolute advantage in making candles and soap. 
C) Neither Bryce nor Tina has an absolute advantage in making candles. 
D) Neither Bryce nor Tina has an absolute advantage in making soap.

Question 7

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
  
Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.Prior to trade, what was the opportunity cost to produce 1 clock in Belize?

Accepted Answer

A) 1/6 of a hat 
B) 2/3 of a hat 
C) 1.5 hats 
D) 6 hats

Question 8

Figure 9-3
  
Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota.
-Refer to Figure 9-3.Without the quota, the domestic price of peanuts equals the world price which is $2.00 per pound.What is the quantity of peanuts supplied by domestic producers in the absence of a quota?

Accepted Answer

A) 10 million pounds 
B) 28 million pounds 
C) 30 million pounds 
D) 40 million pounds

Question 9

Jobs lost to foreign trade are generally easy to identify, but jobs created by foreign trade are generally less easy to identify.

Accepted Answer

A) True 
 B)False

Question 10

Table 9-2
  
Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Sarita has a comparative advantage in baking pies. 
B) Gabriel has an absolute advantage in baking cakes. 
C) Gabriel has a comparative advantage in baking pies. 
D) Gabriel has a comparative advantage in baking pies and baking cakes.

Question 11

Figure 9-1
  
Figure 9-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of consumer surplus?

Accepted Answer

A) $0 
B) $270 
C) $305 
D) $320.

Question 12

Foreign factories produce ________ of the shoes New Balance sells in the United States.

Accepted Answer

A) none 
B) less than 15 percent 
C) roughly half 
D) about 75 percent

Question 13

A quota is the same as a voluntary export restraint.

Accepted Answer

A) True 
 B)False

Question 14

Table 9-6
Output per hour Production and Production
of work Consumption without Trade with Trade
  
Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 9-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats will Denmark consume?

Accepted Answer

A) 150 
B) 180 
C) 270 
D) 400

Question 15

Whenever a buyer and a seller agree to trade,

Accepted Answer

A) the agreement is made based on absolute advantage. 
B) they must have identical opportunity costs in producing their respective products. 
C) one party will always be worse off. 
D) both must believe they will be made better off.

Question 16

When BMW, an German company, purchases a welding machine that was made in Toronto, the purchase is

Accepted Answer

A) both a German and a Canadian import. 
B) a German import and a Canadian export. 
C) a German export and a Canadian import. 
D) neither an export nor an import for either country.

Question 17

In order to avoid the imposition of other types of trade barriers, foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints, foreign producers

Accepted Answer

A) agree to meet specific quality standards required by the importing country. 
B) limit their exports to a country. 
C) pay a tax on all products they export. 
D) must agree to import an equal quantity of products that they export.

Question 18

a.What is the World Trade Organization?
b.When was it established?
c.How many countries are members of the World Trade Organization?

Accepted Answer

The answer of a.What is the World Trade Organization?
b.When was...

Question 19

Table 9-1
  
Linda and Sandy own The Preppy Puppy, a dog grooming business.Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week.
-Refer to Table 9-1.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Linda has an absolute advantage in dog bathing and Sandy has an absolute advantage in dog grooming. 
B) Sandy has an absolute advantage in dog bathing and Linda has an absolute advantage in dog grooming. 
C) Sandy has an absolute advantage in dog bathing and dog grooming. 
D) Linda has an absolute advantage in dog bathing and dog grooming.

Question 20

Today, ________ of shoes sold in the United States are made overseas.

Accepted Answer

A) about 25 percent 
B) just over half 
C) almost 75 percent 
D) 99 percent

Exam 9: Comparative Advantage and the Gains From International Trade

If Estonia has an absolute advantage in the production of two goods compared to Norway, Estonia can not benefit from trade with Norway.

Table 9-5 Table 9-5 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 9-5.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh.

Table 9-3 Bryce and Tina are artisans who produce homemade candles and soap.Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 9-3.Select the statement that accurately interprets the data in the table.

Jobs lost to foreign trade are generally easy to identify, but jobs created by foreign trade are generally less easy to identify.

Table 9-2 Sarita and Gabriel own S&G Bakery.Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2.Select the statement that accurately interprets the data in the table.

Figure 9-1 Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of consumer surplus?

Foreign factories produce ________ of the shoes New Balance sells in the United States.

A quota is the same as a voluntary export restraint.

Whenever a buyer and a seller agree to trade,

When BMW, an German company, purchases a welding machine that was made in Toronto, the purchase is

In order to avoid the imposition of other types of trade barriers, foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints, foreign producers

a.What is the World Trade Organization? b.When was it established? c.How many countries are members of the World Trade Organization?

Table 9-1 Linda and Sandy own The Preppy Puppy, a dog grooming business.Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 9-1.Select the statement that accurately interprets the data in the table.

Today, ________ of shoes sold in the United States are made overseas.