Question 1

The production possibilities curves illustrated in Figure 35.2 reveal that

Accepted Answer

A) The United States has no comparative advantage. 
B) The United States has an absolute advantage in both goods. 
C) Mexico has no comparative advantage. 
D) Mexico has a comparative advantage in baseballs. 
A) The United States has no comparative advantage. 
B) The United States has an absolute advantage in both goods. 
C) Mexico has no comparative advantage. 
D) Mexico has a comparative advantage in baseballs.

Question 2

When one country can produce a given amount of a good using fewer inputs than any other country,

Accepted Answer

A) It has an absolute advantage in producing the good. 
B) It always has a comparative advantage in producing the good. 
C) Specialization will definitely increase worldwide consumption possibilities. 
D) Specialization will definitely increase worldwide production possibilities. 
A) It has an absolute advantage in producing the good. 
B) It always has a comparative advantage in producing the good. 
C) Specialization will definitely increase worldwide consumption possibilities. 
D) Specialization will definitely increase worldwide production possibilities.

Question 3

If we add together all the gains from specialization and trade and then subtract all the losses,the net result would be

Accepted Answer

A) Zero: the gains and losses would cancel out. 
B) Positive: a net gain for the world and each country. 
C) Negative: a net loss for the world and each country. 
D) Impossible to tell: the net result could be zero,positive,or negative. 
A) Zero: the gains and losses would cancel out. 
B) Positive: a net gain for the world and each country. 
C) Negative: a net loss for the world and each country. 
D) Impossible to tell: the net result could be zero,positive,or negative.

Question 4

Which group is most likely to be adversely affected by the importation of foreign steel?

Accepted Answer

A) Consumers of domestic automobiles for which steel is an input. 
B) Domestic steelworkers. 
C) Domestic automobile workers. 
D) Foreign steel producers. 
A) Consumers of domestic automobiles for which steel is an input. 
B) Domestic steelworkers. 
C) Domestic automobile workers. 
D) Foreign steel producers.

Question 5

Table 35.1 $$\begin{array} { | l | c | c | } 
\hline  { \text { Country } } & \text { Tons of Soybeans } & \text { Computer } \
\hline \text { China } & 100 & 300 \
\hline \text { United States } & 150 & 750 \
\hline
\end{array}$$ Based on the information in Table 35.1,assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods.From the information in Table 35.1,it is clear that

Accepted Answer

A) China has a comparative advantage in computers. 
B) China has both an absolute and comparative advantage in soybeans. 
C) The United States has a comparative advantage in both goods. 
D) The United States has an absolute advantage in both goods. 
A) China has a comparative advantage in computers. 
B) China has both an absolute and comparative advantage in soybeans. 
C) The United States has a comparative advantage in both goods. 
D) The United States has an absolute advantage in both goods.

Question 6

Which of the following best describes the comparative advantage of the two countries illustrated in Figure 35.1?

Accepted Answer

A) Japan has a comparative advantage in both goods. 
B) Japan has a comparative advantage in DVD players,the United States in motorcycles. 
C) Japan has a comparative advantage in motorcycles,the United States in DVD players. 
D) The United States has a comparative advantage in both goods. 
A) Japan has a comparative advantage in both goods. 
B) Japan has a comparative advantage in DVD players,the United States in motorcycles. 
C) Japan has a comparative advantage in motorcycles,the United States in DVD players. 
D) The United States has a comparative advantage in both goods.

Question 7

Suppose Canada can produce either 300 tons of paper or 200 HDTVs,and India can produce either 200 tons of paper or 100 HDTVs.The terms of trade between the two countries will lie between

Accepted Answer

A) 1/2 and 2/3 of an HDTV per ton of paper. 
B) 1/3 and 2/3 of an HDTV per ton of paper. 
C) 1/3 and 1/2 of an HDTV per ton of paper. 
D) 1/2 and 1 HDTV per ton of paper. 
A) 1/2 and 2/3 of an HDTV per ton of paper. 
B) 1/3 and 2/3 of an HDTV per ton of paper. 
C) 1/3 and 1/2 of an HDTV per ton of paper. 
D) 1/2 and 1 HDTV per ton of paper.

Question 8

Which of the following policies would not improve the terms of trade from the point of view of import-competing industries in the United States?

Accepted Answer

A) Increasing the degree of free trade. 
B) "Buy American" campaigns. 
C) Placing tariffs on imports of foreign goods. 
D) Restricting imports of foreign goods. 
A) Increasing the degree of free trade. 
B) "Buy American" campaigns. 
C) Placing tariffs on imports of foreign goods. 
D) Restricting imports of foreign goods.

Question 9

Which of the following groups has an interest in encouraging free trade?

Accepted Answer

A) Workers in import-competing industries. 
B) Producers in import-competing industries. 
C) Neither workers nor producers in any industry are in favor of trade. 
D) Workers in export industries. 
A) Workers in import-competing industries. 
B) Producers in import-competing industries. 
C) Neither workers nor producers in any industry are in favor of trade. 
D) Workers in export industries.

Exam 35: International Trade

The production possibilities curves illustrated in Figure 35.2 reveal that

When one country can produce a given amount of a good using fewer inputs than any other country,

If we add together all the gains from specialization and trade and then subtract all the losses,the net result would be

Which group is most likely to be adversely affected by the importation of foreign steel?

Which of the following best describes the comparative advantage of the two countries illustrated in Figure 35.1?

Suppose Canada can produce either 300 tons of paper or 200 HDTVs,and India can produce either 200 tons of paper or 100 HDTVs.The terms of trade between the two countries will lie between

Which of the following policies would not improve the terms of trade from the point of view of import-competing industries in the United States?

Which of the following groups has an interest in encouraging free trade?

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

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Taxes: Equity Versus Efficiency

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