Question 1

Intra-industry trade between similar trading partners allows the gains from _______
That arise when firms and workers specialize in the production of a certain product.

Accepted Answer

A)  comparative advantage 
B)  learning and innovation 
C)  creating the value chain 
D)  relative advantage 
A)  comparative advantage 
B)  learning and innovation 
C)  creating the value chain 
D)  relative advantage B

Question 2

As measured in 2008, about _______ of U.S. trade and _______ of European trade is intra-industry trade.

Accepted Answer

A)  10%; 10% 
B)  30%; 30% 
C)  60%; 60% 
D)  90%; 90% 
A)  10%; 10% 
B)  30%; 30% 
C)  60%; 60% 
D)  90%; 90% C

Question 3

Alternate Outputs from One Day's Labor Input:
USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles.
From the data, the USA:

Accepted Answer

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

Question 4

The reasons that nations trade includes the fact that:

Accepted Answer

A)  no one country produces all of what citizens within the country want. 
B)  the wants of their citizens exceeds their productive capacity. 
C)  different countries have different levels of greed. 
D)  labor costs are too high in some countries to efficiently produce goods. 
A)  no one country produces all of what citizens within the country want. 
B)  the wants of their citizens exceeds their productive capacity. 
C)  different countries have different levels of greed. 
D)  labor costs are too high in some countries to efficiently produce goods.

Question 5

In India one person can produce 330 pounds of rice or 110 shirts in one year. In China one person can produce 400 pounds of rice or 200 shirts in one year. Which of the following statements is true?

Accepted Answer

A)  India has a comparative advantage in the production of rice. 
B)  China has a comparative advantage in the production of rice. 
C)  China has both an absolute and comparative advantage in the production of rice. 
D)  India has an absolute advantage in the production of rice. 
A)  India has a comparative advantage in the production of rice. 
B)  China has a comparative advantage in the production of rice. 
C)  China has both an absolute and comparative advantage in the production of rice. 
D)  India has an absolute advantage in the production of rice.

Question 6

What matters most in determining the efficient distribution of production over the world is:

Accepted Answer

A)  absolute advantage. 
B)  efficiency. 
C)  the allocation of resources. 
D)  comparative advantage. 
A)  absolute advantage. 
B)  efficiency. 
C)  the allocation of resources. 
D)  comparative advantage.

Question 7

The gains from expanding trade are probably most important for the low-income economies in the world as opposed to the gains though trade benefitting the USA. Why might this be so? Offer at least three different reasons comparing and contrasting the USA economy with that of smaller nations.

Accepted Answer

In some ways, the giant U.S. economy has

Question 8

International trade currently involves about _______ worth of goods and services thundering around the globe.

Accepted Answer

A)  $200 trillion 
B)  $20 trillion 
C)  $2 trillion 
D)  $200 billion 
A)  $200 trillion 
B)  $20 trillion 
C)  $2 trillion 
D)  $200 billion

Question 9

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. The opportunity cost of producing 1 orange for Alpha and Beta, respectively, are:

Accepted Answer

A)  0.25 apples; 0.5 apples. 
B)  9 apples; 4 apples. 
C)  0.5 apples; 0.25 apples. 
D)  2 apples; 4 apples 
A)  0.25 apples; 0.5 apples. 
B)  9 apples; 4 apples. 
C)  0.5 apples; 0.25 apples. 
D)  2 apples; 4 apples

Question 10

A skeptic about the gains from global trade might offer up some challenging counterpoint questions regarding trade. Ask at least two questions that counter the numeric benefits of globalization.

Accepted Answer

What if one nation becomes dependent on

Question 11

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. Which of the following terms of trade between apples and oranges would allow both Alpha and Beta to gain by specialization and exchange?

Accepted Answer

A)  1 orange for 0.2 apples 
B)  2 apples for 3 oranges 
C)  3 apples for 3 oranges 
D)  1 apple for 3 oranges 
A)  1 orange for 0.2 apples 
B)  2 apples for 3 oranges 
C)  3 apples for 3 oranges 
D)  1 apple for 3 oranges

Question 12

Define the term in economics "absolute advantage" and illustrate with an example.

Accepted Answer

When one nation can produce a product at

Question 13

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. If the terms of trade are established as 1 apple for 4 oranges, then:

Accepted Answer

A)  there are no incentives for Beta to engage in international specialization and trade with Alpha. 
B)  it is in the interest of Beta to grow oranges and trade for apples. 
C)  it is in the interest of both countries to specialize and trade with one another. 
D)  there are no incentives for Alpha or Beta to specialize and trade with one another. 
A)  there are no incentives for Beta to engage in international specialization and trade with Alpha. 
B)  it is in the interest of Beta to grow oranges and trade for apples. 
C)  it is in the interest of both countries to specialize and trade with one another. 
D)  there are no incentives for Alpha or Beta to specialize and trade with one another.

Question 14

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. Which of the following statements is true?

Accepted Answer

A)  Alpha should export to Beta, but Beta should not export to Alpha. 
B)  Since Alpha has an absolute advantage in both goods, no mutual gains from trade are possible. 
C)  If Alpha specializes in growing oranges and Beta specializes in growing apples, they could both gain by specialization and trade. 
D)  If Alpha specializes in growing apples and Beta specializes in growing oranges, they could both gain by specialization and trade. 
A)  Alpha should export to Beta, but Beta should not export to Alpha. 
B)  Since Alpha has an absolute advantage in both goods, no mutual gains from trade are possible. 
C)  If Alpha specializes in growing oranges and Beta specializes in growing apples, they could both gain by specialization and trade. 
D)  If Alpha specializes in growing apples and Beta specializes in growing oranges, they could both gain by specialization and trade.

Question 15

The underlying reason why trade benefits both sides of a trading arrangement is rooted in the concept of _______.

Accepted Answer

A)  opportunity cost 
B)  specialization 
C)  absolute advantage 
D)  maximum production 
A)  opportunity cost 
B)  specialization 
C)  absolute advantage 
D)  maximum production

Question 16

Alternate Outputs from One Day's Labor Input:
USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles.
The opportunity cost of one bushel of wheat in India is:

Accepted Answer

A)  1 yard of textiles. 
B)  3 yards of textiles. 
C)  4 yards of textiles. 
D)  12 yards of textiles. 
A)  1 yard of textiles. 
B)  3 yards of textiles. 
C)  4 yards of textiles. 
D)  12 yards of textiles.

Question 17

The idea behind comparative advantage reflects the possibility that one party:

Accepted Answer

A)  may be able to produce everything relatively more efficiently than another party. 
B)  may be able to produce something at a lower dollar cost than another party. 
C)  with an absolute advantage in producing two different may export goods both of those goods to the other party. 
D)  may be able to produce something at a lower opportunity cost than another party. 
A)  may be able to produce everything relatively more efficiently than another party. 
B)  may be able to produce something at a lower dollar cost than another party. 
C)  with an absolute advantage in producing two different may export goods both of those goods to the other party. 
D)  may be able to produce something at a lower opportunity cost than another party.

Question 18

The theory of comparative advantage shows that the gains from international trade do not just result from the absolute advantage of producing at lower cost, but also from pursuing comparative advantage and producing at a lower _______.

Accepted Answer

A)  opportunity cost 
B)  absolute cost 
C)  relative cost 
D)  comparative cost 
A)  opportunity cost 
B)  absolute cost 
C)  relative cost 
D)  comparative cost

Question 19

The idea behind comparative advantage reflects the possibility that one party:

Accepted Answer

A)  may be able to produce everything relatively more efficiently than another party. 
B)  may be able to produce something at a lower opportunity cost than another party. 
C)  may be able to produce something at a lower dollar cost than another party. 
D)  with an absolute advantage in producing two different may export goods both of those goods to the other party. 
A)  may be able to produce everything relatively more efficiently than another party. 
B)  may be able to produce something at a lower opportunity cost than another party. 
C)  may be able to produce something at a lower dollar cost than another party. 
D)  with an absolute advantage in producing two different may export goods both of those goods to the other party.

Question 20

Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 36 units of food per year or 18 units of clothing. Which of the following is true?

Accepted Answer

A)  Georgeland has an absolute but not a comparative advantage in producing clothing. 
B)  Georgeland has both an absolute and a comparative advantage in producing clothing. 
C)  Alland has an absolute but not a comparative advantage in producing food. 
D)  Alland has both an absolute and a comparative advantage in producing food. 
A)  Georgeland has an absolute but not a comparative advantage in producing clothing. 
B)  Georgeland has both an absolute and a comparative advantage in producing clothing. 
C)  Alland has an absolute but not a comparative advantage in producing food. 
D)  Alland has both an absolute and a comparative advantage in producing food.

Intra-industry trade between similar trading partners allows the gains from _______ That arise when firms and workers specialize in the production of a certain product.

As measured in 2008, about _ of U.S. trade and _ of European trade is intra-industry trade.

Alternate Outputs from One Day's Labor Input: USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles. From the data, the USA:

The reasons that nations trade includes the fact that:

In India one person can produce 330 pounds of rice or 110 shirts in one year. In China one person can produce 400 pounds of rice or 200 shirts in one year. Which of the following statements is true?

What matters most in determining the efficient distribution of production over the world is:

The gains from expanding trade are probably most important for the low-income economies in the world as opposed to the gains though trade benefitting the USA. Why might this be so? Offer at least three different reasons comparing and contrasting the USA economy with that of smaller nations.

International trade currently involves about _______ worth of goods and services thundering around the globe.

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. The opportunity cost of producing 1 orange for Alpha and Beta, respectively, are:

A skeptic about the gains from global trade might offer up some challenging counterpoint questions regarding trade. Ask at least two questions that counter the numeric benefits of globalization.

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. Which of the following terms of trade between apples and oranges would allow both Alpha and Beta to gain by specialization and exchange?

Define the term in economics "absolute advantage" and illustrate with an example.

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. If the terms of trade are established as 1 apple for 4 oranges, then:

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. Which of the following statements is true?

The underlying reason why trade benefits both sides of a trading arrangement is rooted in the concept of _______.

Alternate Outputs from One Day's Labor Input: USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles. The opportunity cost of one bushel of wheat in India is:

The idea behind comparative advantage reflects the possibility that one party:

The theory of comparative advantage shows that the gains from international trade do not just result from the absolute advantage of producing at lower cost, but also from pursuing comparative advantage and producing at a lower _______.

The idea behind comparative advantage reflects the possibility that one party:

Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 36 units of food per year or 18 units of clothing. Which of the following is true?

Welcome to Economics

Choice in a World of Scarcity

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Labor and Financial Markets

Elasticity

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

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Exam 19: International Trade

Intra-industry trade between similar trading partners allows the gains from _______ That arise when firms and workers specialize in the production of a certain product.

As measured in 2008, about _______ of U.S. trade and _______ of European trade is intra-industry trade.

Alternate Outputs from One Day's Labor Input: USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles. From the data, the USA:

The reasons that nations trade includes the fact that:

In India one person can produce 330 pounds of rice or 110 shirts in one year. In China one person can produce 400 pounds of rice or 200 shirts in one year. Which of the following statements is true?

What matters most in determining the efficient distribution of production over the world is:

The gains from expanding trade are probably most important for the low-income economies in the world as opposed to the gains though trade benefitting the USA. Why might this be so? Offer at least three different reasons comparing and contrasting the USA economy with that of smaller nations.

International trade currently involves about _______ worth of goods and services thundering around the globe.

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. The opportunity cost of producing 1 orange for Alpha and Beta, respectively, are:

A skeptic about the gains from global trade might offer up some challenging counterpoint questions regarding trade. Ask at least two questions that counter the numeric benefits of globalization.

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. Which of the following terms of trade between apples and oranges would allow both Alpha and Beta to gain by specialization and exchange?

Define the term in economics "absolute advantage" and illustrate with an example.

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. If the terms of trade are established as 1 apple for 4 oranges, then:

Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. Which of the following statements is true?

The underlying reason why trade benefits both sides of a trading arrangement is rooted in the concept of _______.

Alternate Outputs from One Day's Labor Input: USA: 12 bushels of wheat or 3 yards of textiles. India: 3 bushels of wheat or 12 yards of textiles. The opportunity cost of one bushel of wheat in India is:

The idea behind comparative advantage reflects the possibility that one party:

The theory of comparative advantage shows that the gains from international trade do not just result from the absolute advantage of producing at lower cost, but also from pursuing comparative advantage and producing at a lower _______.

The idea behind comparative advantage reflects the possibility that one party:

Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 36 units of food per year or 18 units of clothing. Which of the following is true?

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

Globalization and Protectionism

Filters

As measured in 2008, about _ of U.S. trade and _ of European trade is intra-industry trade.