Exam 19: International Trade

The slope of the production possibility frontier is determined by the _______ of expanding production of one good, measured by how much of the other good would be lost.

Suppose that the USA can make 15,000,000 cars or 20,000,000 bottles of wine with one year's worth of labor. France can make 10,000,000 cars or 18,000,000 bottles of wine with one year's worth of labor. From these numbers, we can conclude:

Which of the following is true?

Jethro has a(n) _______ in all aspects of camping: he is faster at carrying a backpack, gathering firewood, paddling a canoe, setting up tents, making a meal, and washing up.

Steve and Craig have been shipwrecked on a deserted island in the South Pacific. Their economic activity consists of either gathering pineapples or fishing. We know Steve can catch four fish in one hour or harvest two baskets of pineapples. In the same time Craig can reel in two fish or harvest two baskets of pineapples. If they each spend four hours a day fishing and four hours a day harvesting pineapples, how many of each will Steve produce? How many will Craig produce? What will their total production be?

The opportunity cost of producing a pair of pants in the USA is 5 bushels of wheat, while in China, it is 2 bushels of wheat. As a result:

Trade allows each country to take advantage of _______ in the other country.

Colombia produces coffee with less labor and land than any other country; it therefore necessarily has:

What is comparative advantage, and why is it important in international trade?

Define "splitting up the value chain." List some factors that have allowed this trend to accelerate in recent years.

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 2 oranges, then:

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 24 units of food per year or 12 units of clothing. Which of the following is true?

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 24 units of food per year or 12 units of clothing. Which of the following is true?

When one nation can produce a product at lower cost relative to another nation, it is said to have a(n) _______ in producing that product.

The concept of _______ means that as the measure of output goes up, average costs of production decline-at least up to a point.

Suppose that Canada can produce 100,000 hockey sticks or 10,000 gallons of maple syrup in a typical workweek, while Germany can produce 90,000 hockey sticks or 10,000 gallons of maple syrup in a typical workweek. From these numbers, we can conclude:

Some nations that seek to produce all of their own needs face the problem that:

When nations increase production in their area of _______ and trade with each other, both sides can benefit.

Describe "the value chain" and illustrate with an example.

According to international trade theory, a country should: