Question 1

-Refer to table 13.13 to answer this question.What is the cost of producing one sword in Rings?

Accepted Answer

A) 4 broomsticks. 
B) 0.25 broomsticks. 
C) 0.67 broomsticks. 
D) 1.5 broomsticks. 
A) 4 broomsticks. 
B) 0.25 broomsticks. 
C) 0.67 broomsticks. 
D) 1.5 broomsticks.

Question 2

Below is production possibilities data for the countries of Mental and Etheric.
  
-Refer to the information above to answer this question.Suppose that each country was producing combination D before trade but then specializes in the product in which it has a comparative advantage.What would be the total gains from trade?

Accepted Answer

A) 40 million units of rice cakes. 
B) 100 million units of rice cakes. 
C) 60 million units of soya milk and 40 million units of rice cakes. 
D) 40 million units of soya milk and 60 million units of rice cakes. 
E) 20 million units of soya milk. 
A) 40 million units of rice cakes. 
B) 100 million units of rice cakes. 
C) 60 million units of soya milk and 40 million units of rice cakes. 
D) 40 million units of soya milk and 60 million units of rice cakes. 
E) 20 million units of soya milk.

Question 3

Refer to the data above to answer this question.In which product does Catalonia have a comparative advantage?

Accepted Answer

A) Rice. 
B) Beer. 
C) Both rice and beer. 
D) Neither rice nor beer. 
A) Rice. 
B) Beer. 
C) Both rice and beer. 
D) Neither rice nor beer.

Question 4

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100.
  
-Refer to the graph above to answer this question.Assuming there is free trade,what quantity of mustard seeds will be imported?

Accepted Answer

A) 0. 
B) 800 
C) 1,000. 
D) 1,200. 
E) 1,400. 
A) 0. 
B) 800 
C) 1,000. 
D) 1,200. 
E) 1,400.

Question 5

Table 13.2 shows the production possibilities curves for Troy and Sparta.Prior to specialization and trade,Troy is producing combination B,and Sparta is producing combination D.
Table 13.2

Accepted Answer

a)7 units of carrot and 7 units of olive

Question 6

Table 13.14 shows the output of kumquats per month.
  
-Explain why free trade may not be possible.

Accepted Answer

Free trade may not be possible because o

Question 7

Figure 9.10 shows the market for cloth in Smith Island.
  
-Refer to Figure 9.10 to answer this question.If Smith Island introduced a tariff of $10 on cloth,how much would be imported?

Accepted Answer

A) 0 units. 
B) 10 units. 
C) 20 units. 
D) 40 units. 
A) 0 units. 
B) 10 units. 
C) 20 units. 
D) 40 units.

Question 8

What is a tariff?

Accepted Answer

A) A restriction placed on the importation of foreign products. 
B) A maximum or minimum price placed on a product by government regulation. 
C) A limit imposed on the production or sale of a product. 
D) A tax or duty levied on imports. 
A) A restriction placed on the importation of foreign products. 
B) A maximum or minimum price placed on a product by government regulation. 
C) A limit imposed on the production or sale of a product. 
D) A tax or duty levied on imports.

Question 9

Below is the total market demand and supply of wine for France and Germany.Quantities are in millions of litres per month.
  
-Refer to the information above to answer this question.Assuming no trade,what are the equilibrium price and quantity of wine in Germany?

Accepted Answer

A) $6 and 10. 
B) $7 and 5. 
C) $8 and 7. 
D) $9 and 7. 
A) $6 and 10. 
B) $7 and 5. 
C) $8 and 7. 
D) $9 and 7.

Question 10

Table 13.14 shows the output of kumquats per month.
  
-To what extent are the conclusions of the theory of comparative advantage affected if unit costs increase rather than remain the same as output increases?

Accepted Answer

It means that the cost advantage that a

Question 11

Table 13.1 shows the production possibilities curves for Augustus and Nero.Prior to specialization and trade,Augustus is producing combination B,and Nero is producing combination D.
Table 13.1
   
a)What is the total output of the two countries for both products?
b)If each country were to specialize in the product in which it has a comparative advantage,what will be the total output of the two countries for both products?
c)What will be the gain from trade?

Accepted Answer

a)9 units of apples and 5 units of orang

Question 12

Below is the productivity per worker (kilos per day)in the wheat and bean industries of Caledonia and Ibrox.The working population in each country is 16 million people.
  
-Refer to the data above to answer this question.What is the cost of a kilo of beans in Ibrox?

Accepted Answer

A) 0.5 wheat. 
B) 6 wheat. 
C) 3 beans. 
D) 2 wheat. 
A) 0.5 wheat. 
B) 6 wheat. 
C) 3 beans. 
D) 2 wheat.

Question 13

Table 13.14 shows the output of kumquats per month.
  
-Suppose that the productivity per worker in the corn and barley industries of China and Russia are as follows:
   a)What is the opportunity cost of 1 bushel of corn for China? For Russia?
b)What is the opportunity cost of 1 bushel of barley for China? For Russia?
c)Suppose there are 1000 workers in both China and Russia.Draw a production possibility curve for China and Russia

Accepted Answer

a)China:2 bushels of barley.
R

Question 14

-Refer to above figure to answer this question.Suppose that both Harmony and Tranquility are producing 20 pears;what will be the total gains from trade for the two countries?

Accepted Answer

A) 20 apples and 0 pears. 
B) 30 apples and 10 pears. 
C) 20 apples and 10 pears. 
D) 20 apples and 30 pears. 
E) 0 apples and 20 pears. 
A) 20 apples and 0 pears. 
B) 30 apples and 10 pears. 
C) 20 apples and 10 pears. 
D) 20 apples and 30 pears. 
E) 0 apples and 20 pears.

Question 15

Below is a graph illustrating rice and flax production in the countries of Cardassia and Bajor.
  
-Refer to the graph above to answer this question.What is the opportunity cost of 100 tons of rice in Cardassia?

Accepted Answer

A) 80 tons of flax. 
B) 100 tons of flax. 
C) 125 tons of flax. 
D) 200 tons of flax. 
E) 500 tons of flax. 
A) 80 tons of flax. 
B) 100 tons of flax. 
C) 125 tons of flax. 
D) 200 tons of flax. 
E) 500 tons of flax.

Question 16

What are the two largest categories of goods that Canada exports?

Accepted Answer

A) Energy and forestry products. 
B) Agricultural and forestry products. 
C) Forestry products and industrial materials. 
D) Energy and automotive products. 
A) Energy and forestry products. 
B) Agricultural and forestry products. 
C) Forestry products and industrial materials. 
D) Energy and automotive products.

Question 17

What term describes the average price of a country's exports compared with the price of its imports?

Accepted Answer

A) The trade deficit. 
B) The gains from trade. 
C) The terms of trade. 
D) The factor endowment. 
A) The trade deficit. 
B) The gains from trade. 
C) The terms of trade. 
D) The factor endowment.

Question 18

All of the following,except one,are reasons why complete free trade may not be possible.Which is the exception?

Accepted Answer

A) Transportation costs might exceed any cost differences between countries. 
B) Higher taxes in one country than another might exceed any cost differences. 
C) Free trade usually causes a reduction in international competition. 
D) Differences in languages and cultures might restrict the amount of trade. 
E) Cost differences between countries disappear as one country tries to totally specialize. 
A) Transportation costs might exceed any cost differences between countries. 
B) Higher taxes in one country than another might exceed any cost differences. 
C) Free trade usually causes a reduction in international competition. 
D) Differences in languages and cultures might restrict the amount of trade. 
E) Cost differences between countries disappear as one country tries to totally specialize.

Question 19

Suppose that the cost of producing 1 unit of wine in Happy Island is 2 units of rice;in Joy Island 1 wine costs 4 rice.What might be possible terms of trade between the two countries?

Accepted Answer

A) 1 rice = 3/8 wine. 
B) 1 rice = 3 wine. 
C) 1 rice = 6 wine. 
D) 1 wine = 1 rice. 
A) 1 rice = 3/8 wine. 
B) 1 rice = 3 wine. 
C) 1 rice = 6 wine. 
D) 1 wine = 1 rice.

Question 20

Table 13.14 shows the output of kumquats per month.
  
-If a country wishes to specialize its production,it will also want to engage in trade.

Accepted Answer

A) True 
 B)False

-Refer to table 13.13 to answer this question.What is the cost of producing one sword in Rings?

Refer to the data above to answer this question.In which product does Catalonia have a comparative advantage?

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100. -Refer to the graph above to answer this question.Assuming there is free trade,what quantity of mustard seeds will be imported?

Table 13.2 shows the production possibilities curves for Troy and Sparta.Prior to specialization and trade,Troy is producing combination B,and Sparta is producing combination D. Table 13.2

Table 13.14 shows the output of kumquats per month. -Explain why free trade may not be possible.

Figure 9.10 shows the market for cloth in Smith Island. -Refer to Figure 9.10 to answer this question.If Smith Island introduced a tariff of $10 on cloth,how much would be imported?

What is a tariff?

Below is the total market demand and supply of wine for France and Germany.Quantities are in millions of litres per month. -Refer to the information above to answer this question.Assuming no trade,what are the equilibrium price and quantity of wine in Germany?

Table 13.14 shows the output of kumquats per month. -To what extent are the conclusions of the theory of comparative advantage affected if unit costs increase rather than remain the same as output increases?

Below is the productivity per worker (kilos per day)in the wheat and bean industries of Caledonia and Ibrox.The working population in each country is 16 million people. -Refer to the data above to answer this question.What is the cost of a kilo of beans in Ibrox?

-Refer to above figure to answer this question.Suppose that both Harmony and Tranquility are producing 20 pears;what will be the total gains from trade for the two countries?

Below is a graph illustrating rice and flax production in the countries of Cardassia and Bajor. -Refer to the graph above to answer this question.What is the opportunity cost of 100 tons of rice in Cardassia?

What are the two largest categories of goods that Canada exports?

What term describes the average price of a country's exports compared with the price of its imports?

All of the following,except one,are reasons why complete free trade may not be possible.Which is the exception?

Suppose that the cost of producing 1 unit of wine in Happy Island is 2 units of rice;in Joy Island 1 wine costs 4 rice.What might be possible terms of trade between the two countries?

Table 13.14 shows the output of kumquats per month. -If a country wishes to specialize its production,it will also want to engage in trade.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

Filters

Exam 13: International Trade

-Refer to table 13.13 to answer this question.What is the cost of producing one sword in Rings?

Refer to the data above to answer this question.In which product does Catalonia have a comparative advantage?

Below is a graph illustrating the market for mustard seeds in Rysen III.(Sd is domestic supply,and Dd is domestic demand. ).The world price of mustard seeds is $100. -Refer to the graph above to answer this question.Assuming there is free trade,what quantity of mustard seeds will be imported?

Table 13.2 shows the production possibilities curves for Troy and Sparta.Prior to specialization and trade,Troy is producing combination B,and Sparta is producing combination D. Table 13.2

Table 13.14 shows the output of kumquats per month. -Explain why free trade may not be possible.

Figure 9.10 shows the market for cloth in Smith Island. -Refer to Figure 9.10 to answer this question.If Smith Island introduced a tariff of $10 on cloth,how much would be imported?

What is a tariff?

Below is the total market demand and supply of wine for France and Germany.Quantities are in millions of litres per month. -Refer to the information above to answer this question.Assuming no trade,what are the equilibrium price and quantity of wine in Germany?

Table 13.14 shows the output of kumquats per month. -To what extent are the conclusions of the theory of comparative advantage affected if unit costs increase rather than remain the same as output increases?

Below is the productivity per worker (kilos per day)in the wheat and bean industries of Caledonia and Ibrox.The working population in each country is 16 million people. -Refer to the data above to answer this question.What is the cost of a kilo of beans in Ibrox?

-Refer to above figure to answer this question.Suppose that both Harmony and Tranquility are producing 20 pears;what will be the total gains from trade for the two countries?

Below is a graph illustrating rice and flax production in the countries of Cardassia and Bajor. -Refer to the graph above to answer this question.What is the opportunity cost of 100 tons of rice in Cardassia?

What are the two largest categories of goods that Canada exports?

What term describes the average price of a country's exports compared with the price of its imports?

All of the following,except one,are reasons why complete free trade may not be possible.Which is the exception?

Suppose that the cost of producing 1 unit of wine in Happy Island is 2 units of rice;in Joy Island 1 wine costs 4 rice.What might be possible terms of trade between the two countries?

Table 13.14 shows the output of kumquats per month. -If a country wishes to specialize its production,it will also want to engage in trade.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

Filters