Question 1

People participate in international trade basically because:

Accepted Answer

A)  they are better off by doing so. 
B)  they must. 
C)  it makes other countries better off. 
D)  they prefer to share their income with people in other countries. 
A)  they are better off by doing so. 
B)  they must. 
C)  it makes other countries better off. 
D)  they prefer to share their income with people in other countries.

Question 2

Use the following to answer question(s): Production Possibilities Schedule for Two Commodities
  
-(Exhibit: Production Possibilities Schedule for Two Commodities) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of commodity X each country would have to forgo to produce the additional units of commodity Y indicated.Further assume that the only input is labor and that it remains fully employed.If there were unrestricted trade and specialization according to the law of comparative advantage:

Accepted Answer

A)  the United States would export Y and Canada would export X. 
B)  the United States would export X and Canada would export Y. 
C)  the United States would export both X and Y. 
D)  the United States and Canada would each be self-sufficient in both X and Y. 
A)  the United States would export Y and Canada would export X. 
B)  the United States would export X and Canada would export Y. 
C)  the United States would export both X and Y. 
D)  the United States and Canada would each be self-sufficient in both X and Y.

Question 3

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:

Accepted Answer

A)  1/25B = 1T. 
B)  1B = 1T. 
C)  1B = 25T. 
D)  25B = 1T. 
A)  1/25B = 1T. 
B)  1B = 1T. 
C)  1B = 25T. 
D)  25B = 1T.

Question 4

Use the following to answer question(s): The Production of Tires and Radios
  
-(Exhibit: The Production of Tires and Radios) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of tires each country would have to forgo in order to produce the additional radios indicated.Further assume that the only input is labor and that it remains fully employed.The cost to country Y of producing an additional radio is _______ tire(s).

Accepted Answer

A)  1/3 
B)  1/2 
C)  2 
D)  3 
A)  1/3 
B)  1/2 
C)  2 
D)  3

Question 5

If the opportunity cost is 2X = 1Y for country A and 1/3X = 1Y for country B, then a possible terms of trade is:

Accepted Answer

A)  1X = 1Y. 
B)  1X = 4Y. 
C)  1X = 5Y. 
D)  3X = 1Y. 
A)  1X = 1Y. 
B)  1X = 4Y. 
C)  1X = 5Y. 
D)  3X = 1Y.

Question 6

Members of the EU (European Union):

Accepted Answer

A)  have virtually eliminated all trade barriers within the community. 
B)  have increased trade restrictions among them. 
C)  have made it more difficult to trade with each other. 
D)  no longer trade with North America. 
A)  have virtually eliminated all trade barriers within the community. 
B)  have increased trade restrictions among them. 
C)  have made it more difficult to trade with each other. 
D)  no longer trade with North America.

People participate in international trade basically because:

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:

If the opportunity cost is 2X = 1Y for country A and 1/3X = 1Y for country B, then a possible terms of trade is:

Members of the EU (European Union):

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 17: International Trade

People participate in international trade basically because:

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:

If the opportunity cost is 2X = 1Y for country A and 1/3X = 1Y for country B, then a possible terms of trade is:

Members of the EU (European Union):

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters