Question 1

William Safire argues that a unilateral free trade policy is a disaster if

Accepted Answer

A)  the governments of the nations' trading partners practice "helpfulism." 
B)  infant industries are allowed to expire. 
C)  the national defense is endangered. 
D)  it hurts the poor. 
A)  the governments of the nations' trading partners practice "helpfulism." 
B)  infant industries are allowed to expire. 
C)  the national defense is endangered. 
D)  it hurts the poor.

Question 2

Labor is defined as cheap only if its productivity is very low.

Accepted Answer

A) True 
 B)False

Question 3

Figure 22-5  
-From the graph in Figure 22-5 (curves show output per unit of labor input),one can infer that

Accepted Answer

A)  in terms of TVs,computers are more expensive in China than Japan. 
B)  in terms of computers,TVs are more expensive in China than Japan. 
C)  China should produce more TVs and fewer computers. 
D)  All of the above are correct. 
A)  in terms of TVs,computers are more expensive in China than Japan. 
B)  in terms of computers,TVs are more expensive in China than Japan. 
C)  China should produce more TVs and fewer computers. 
D)  All of the above are correct.

Question 4

Suppose that the United States can make 15 cars or 20 bottles of wine with one year's worth of labor.France can make 10 cars or 18 bottles of wine with one year's worth of labor.From these numbers,we can conclude that

Accepted Answer

A)  the United States has a comparative advantage in the production of cars. 
B)  France has a comparative advantage in the production of wine. 
C)  the United States has an absolute advantage in the production of cars. 
D)  All of the above are correct. 
A)  the United States has a comparative advantage in the production of cars. 
B)  France has a comparative advantage in the production of wine. 
C)  the United States has an absolute advantage in the production of cars. 
D)  All of the above are correct.

Question 5

Carefully define the following terms and explain their importance to the study of economics.
a.
specialization
b.
absolute advantage
c.
comparative advantage
d.
quota
e.
trade adjustment assistance

Accepted Answer

a. Specialization means that a country d

Question 6

A country has a comparative advantage over another in the production of gadgets if it can produce

Accepted Answer

A)  more gadgets than can the other country. 
B)  more gadgets than can any other country. 
C)  gadgets more efficiently than it can produce any other good. 
D)  gadgets at lower opportunity cost than can the other country. 
A)  more gadgets than can the other country. 
B)  more gadgets than can any other country. 
C)  gadgets more efficiently than it can produce any other good. 
D)  gadgets at lower opportunity cost than can the other country.

Question 7

Among the impediments to the international mobility of capital are

Accepted Answer

A)  restrictions on foreign ownership. 
B)  fear of nationalization or political instability. 
C)  fluctuations in exchange rates. 
D)  All of the above are correct. 
A)  restrictions on foreign ownership. 
B)  fear of nationalization or political instability. 
C)  fluctuations in exchange rates. 
D)  All of the above are correct.

Question 8

Political factors influence international trade because

Accepted Answer

A)  foreign trade always involves at least two governments. 
B)  foreign governments are much less concerned with the welfare of citizens in other countries. 
C)  foreign governments often establish impediments to free international trade. 
D)  All of the above are correct. 
A)  foreign trade always involves at least two governments. 
B)  foreign governments are much less concerned with the welfare of citizens in other countries. 
C)  foreign governments often establish impediments to free international trade. 
D)  All of the above are correct.

Question 9

From 1975 to 2008,which of the following countries experienced greater wage increases than the U.S.?

Accepted Answer

A)  Japan 
B)  South Korea 
C)  Taiwan 
D)  all of the above 
A)  Japan 
B)  South Korea 
C)  Taiwan 
D)  all of the above

Question 10

Quotas increase the profits of importers but decrease the profits of exporters.

Accepted Answer

A) True 
 B)False

Question 11

Figure 22-6  
-From the graph in Figure 22-6,the opportunity cost of a unit of bananas is

Accepted Answer

A)  4 units of corn for England; 1/2 unit of corn for Honduras. 
B)  1/4 unit of corn for England; 2 units of bananas in England. 
C)  8 units of corn in England; 3 units of corn in Honduras. 
D)  4 units of corn in England; 12 units of corn in Honduras. 
A)  4 units of corn for England; 1/2 unit of corn for Honduras. 
B)  1/4 unit of corn for England; 2 units of bananas in England. 
C)  8 units of corn in England; 3 units of corn in Honduras. 
D)  4 units of corn in England; 12 units of corn in Honduras.

Question 12

The supply-demand mechanism will bring an international market into equilibrium

Accepted Answer

A)  at a price below the domestic price. 
B)  where domestic supplies are less than domestic demand. 
C)  with one nation's price higher than the other nation's price. 
D)  when the quantity demanded for exports is equal to quantity supplied. 
A)  at a price below the domestic price. 
B)  where domestic supplies are less than domestic demand. 
C)  with one nation's price higher than the other nation's price. 
D)  when the quantity demanded for exports is equal to quantity supplied.

Question 13

If a nation has "cheap labor,"

Accepted Answer

A)  it can still benefit from trade. 
B)  other nations can still compete with it. 
C)  it cannot have a comparative advantage in everything. 
D)  All of the above are true. 
A)  it can still benefit from trade. 
B)  other nations can still compete with it. 
C)  it cannot have a comparative advantage in everything. 
D)  All of the above are true.

Question 14

Equilibrium price in international trade is the common price between exporting and importing countries.

Accepted Answer

A) True 
 B)False

Question 15

A program of protection that results in preserving jobs in certain industries

Accepted Answer

A)  raises average productivity in all sectors of the economy. 
B)  does so at very high cost to consumers of the products from those industries. 
C)  is an efficient way to preserve employment,and is cheaper than other forms of maintaining full employment. 
D)  is an effective way of encouraging innovation and improvement in production. 
A)  raises average productivity in all sectors of the economy. 
B)  does so at very high cost to consumers of the products from those industries. 
C)  is an efficient way to preserve employment,and is cheaper than other forms of maintaining full employment. 
D)  is an effective way of encouraging innovation and improvement in production.

Question 16

From Table 22-1,the United States

Accepted Answer

A)  has an absolute advantage over Great Britain in the production of textiles. 
B)  has an absolute advantage over Great Britain in the production of wheat. 
C)  has a comparative advantage in the production of textiles. 
D)  should export textiles to Great Britain. 
A)  has an absolute advantage over Great Britain in the production of textiles. 
B)  has an absolute advantage over Great Britain in the production of wheat. 
C)  has a comparative advantage in the production of textiles. 
D)  should export textiles to Great Britain.

Question 17

If Brazil voluntarily ships coffee to the United States in return for airplanes,

Accepted Answer

A)  Brazil will benefit,but the United States will lose. 
B)  one of the two nations will benefit and the other nation will lose since the trade does not increase the physical quantities of coffee and airplanes available. 
C)  both Brazil and the United States will benefit since the trade allows each nation to acquire items. 
D)  both Brazil and the United States will lose since there is no increase in the production of coffee or airplanes and the trade will involve certain transaction costs. 
A)  Brazil will benefit,but the United States will lose. 
B)  one of the two nations will benefit and the other nation will lose since the trade does not increase the physical quantities of coffee and airplanes available. 
C)  both Brazil and the United States will benefit since the trade allows each nation to acquire items. 
D)  both Brazil and the United States will lose since there is no increase in the production of coffee or airplanes and the trade will involve certain transaction costs.

Question 18

Figure 22-2  
-In Figure 22-2,

Accepted Answer

A)  the opportunity cost of 1 unit of wheat in the United States is a 2/3 unit of petroleum. 
B)  the opportunity cost of 1 unit of wheat in Mexico is a 2/3 unit of petroleum. 
C)  the opportunity cost of wheat is higher in the United States than it is in Mexico. 
D)  the United States has a comparative advantage over Mexico in the production of petroleum. 
A)  the opportunity cost of 1 unit of wheat in the United States is a 2/3 unit of petroleum. 
B)  the opportunity cost of 1 unit of wheat in Mexico is a 2/3 unit of petroleum. 
C)  the opportunity cost of wheat is higher in the United States than it is in Mexico. 
D)  the United States has a comparative advantage over Mexico in the production of petroleum.

Question 19

The quantity supplied by domestic producers in an importing country must be less than the quantity demanded by its population.

Accepted Answer

A) True 
 B)False

Question 20

The United States is known worldwide as being a low tariff nation.

Accepted Answer

A) True 
 B)False

William Safire argues that a unilateral free trade policy is a disaster if

Labor is defined as cheap only if its productivity is very low.

Figure 22-5 -From the graph in Figure 22-5 (curves show output per unit of labor input),one can infer that

Suppose that the United States can make 15 cars or 20 bottles of wine with one year's worth of labor.France can make 10 cars or 18 bottles of wine with one year's worth of labor.From these numbers,we can conclude that

Carefully define the following terms and explain their importance to the study of economics. a. specialization b. absolute advantage c. comparative advantage d. quota e. trade adjustment assistance

A country has a comparative advantage over another in the production of gadgets if it can produce

Among the impediments to the international mobility of capital are

Political factors influence international trade because

From 1975 to 2008,which of the following countries experienced greater wage increases than the U.S.?

Quotas increase the profits of importers but decrease the profits of exporters.

Figure 22-6 -From the graph in Figure 22-6,the opportunity cost of a unit of bananas is

The supply-demand mechanism will bring an international market into equilibrium

If a nation has "cheap labor,"

Equilibrium price in international trade is the common price between exporting and importing countries.

A program of protection that results in preserving jobs in certain industries

From Table 22-1,the United States

If Brazil voluntarily ships coffee to the United States in return for airplanes,

Figure 22-2 -In Figure 22-2,

The quantity supplied by domestic producers in an importing country must be less than the quantity demanded by its population.

The United States is known worldwide as being a low tariff nation.

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

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Exam 18: International Trade and Comparative Advantage

William Safire argues that a unilateral free trade policy is a disaster if

Labor is defined as cheap only if its productivity is very low.

Figure 22-5 -From the graph in Figure 22-5 (curves show output per unit of labor input),one can infer that

Suppose that the United States can make 15 cars or 20 bottles of wine with one year's worth of labor.France can make 10 cars or 18 bottles of wine with one year's worth of labor.From these numbers,we can conclude that

Carefully define the following terms and explain their importance to the study of economics. a. specialization b. absolute advantage c. comparative advantage d. quota e. trade adjustment assistance

A country has a comparative advantage over another in the production of gadgets if it can produce

Among the impediments to the international mobility of capital are

Political factors influence international trade because

From 1975 to 2008,which of the following countries experienced greater wage increases than the U.S.?

Quotas increase the profits of importers but decrease the profits of exporters.

Figure 22-6 -From the graph in Figure 22-6,the opportunity cost of a unit of bananas is

The supply-demand mechanism will bring an international market into equilibrium

If a nation has "cheap labor,"

Equilibrium price in international trade is the common price between exporting and importing countries.

A program of protection that results in preserving jobs in certain industries

From Table 22-1,the United States

If Brazil voluntarily ships coffee to the United States in return for airplanes,

Figure 22-2 -In Figure 22-2,

The quantity supplied by domestic producers in an importing country must be less than the quantity demanded by its population.

The United States is known worldwide as being a low tariff nation.

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters