Question 1

Assume that China has a comparative advantage in producing corn and exports corn to Japan.We can conclude that

Accepted Answer

A)  China also has an absolute advantage in producing corn relative to Japan. 
B)  China has a lower opportunity cost of producing corn relative to Japan. 
C)  Japan has an absolute disadvantage in producing corn relative to China. 
D)  labour costs are higher for corn producers in Japan than in China. 
A)  China also has an absolute advantage in producing corn relative to Japan. 
B)  China has a lower opportunity cost of producing corn relative to Japan. 
C)  Japan has an absolute disadvantage in producing corn relative to China. 
D)  labour costs are higher for corn producers in Japan than in China.

Question 2

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed,it

Accepted Answer

A)  greatly decreased imports and exports among its member countries. 
B)  barred imports of 747 jumbo jets by its member countries; all EU countries must now buy jets from Airbus, a European company. 
C)  eliminated all tariffs among member countries. 
D)  completed a trade treaty (NAFT
A)  that reduced tariff rates between the EU and North American countries. 
A)  greatly decreased imports and exports among its member countries. 
B)  barred imports of 747 jumbo jets by its member countries; all EU countries must now buy jets from Airbus, a European company. 
C)  eliminated all tariffs among member countries. 
D)  completed a trade treaty (NAFT
A)  that reduced tariff rates between the EU and North American countries.

Question 3

Table 18-1
   Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 18-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week.
-Refer to Table 18-1.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Sandy has a comparative advantage in dog grooming. 
B)  Linda has a comparative advantage in dog grooming. 
C)  Linda has a comparative advantage in dog grooming and dog bathing. 
D)  Sandy has a comparative advantage in dog bathing. 
A)  Sandy has a comparative advantage in dog grooming. 
B)  Linda has a comparative advantage in dog grooming. 
C)  Linda has a comparative advantage in dog grooming and dog bathing. 
D)  Sandy has a comparative advantage in dog bathing.

Question 4

Table 18-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.Which country has a comparative advantage in producing clocks?

Accepted Answer

A)  Denmark 
B)  Belize 
C)  Both countries 
D)  Neither country 
A)  Denmark 
B)  Belize 
C)  Both countries 
D)  Neither country

Question 5

The largest proportion of world trade is in which of the following sectors?

Accepted Answer

A)  Agriculture 
B)  Manufacturing 
C)  Mining 
D)  Services 
A)  Agriculture 
B)  Manufacturing 
C)  Mining 
D)  Services

Question 6

Distinguish between a voluntary export restraint and a quota.

Accepted Answer

A voluntary export restraint is an agree

Question 7

Table 18-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Denmark consume?

Accepted Answer

A)  270 
B)  900 
C)  930 
D)  1200 
A)  270 
B)  900 
C)  930 
D)  1200

Question 8

Countries that engage in trade will tend to specialise in the production of goods and services in which they have ________ and will ________ these goods and services.

Accepted Answer

A)  a comparative advantage; import 
B)  an absolute advantage; export 
C)  a comparative advantage; export 
D)  an absolute advantage; import 
A)  a comparative advantage; import 
B)  an absolute advantage; export 
C)  a comparative advantage; export 
D)  an absolute advantage; import

Question 9

Table 18-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.Which country has an absolute advantage in producing clocks?

Accepted Answer

A)  Denmark 
B)  Belize 
C)  Both countries 
D)  Neither country 
A)  Denmark 
B)  Belize 
C)  Both countries 
D)  Neither country

Question 10

A tax imposed by a government on imports of a good into a country is called

Accepted Answer

A)  an import fine. 
B)  an import quota. 
C)  a tariff. 
D)  an import levy. 
A)  an import fine. 
B)  an import quota. 
C)  a tariff. 
D)  an import levy.

Question 11

Table 18-3
   Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Bryce has a greater opportunity cost than Tina for making candles. 
B)  Bryce's opportunity cost for making candles is less than Tina's. 
C)  Tina has a greater opportunity cost than Bryce for making candles. 
D)  Bryce's opportunity cost for making candles and making soap are both greater than Tina's. 
A)  Bryce has a greater opportunity cost than Tina for making candles. 
B)  Bryce's opportunity cost for making candles is less than Tina's. 
C)  Tina has a greater opportunity cost than Bryce for making candles. 
D)  Bryce's opportunity cost for making candles and making soap are both greater than Tina's.

Question 12

In the real world we don't observe countries completely specialising in the production of goods for which they have a comparative advantage.One reasons for this is that

Accepted Answer

A)  comparative advantage works better in theory than in practice. 
B)  some countries have more resources than other countries. 
C)  tastes for many traded goods are similar in many countries because of globalisation. 
D)  production of most goods involves increasing opportunity costs. 
A)  comparative advantage works better in theory than in practice. 
B)  some countries have more resources than other countries. 
C)  tastes for many traded goods are similar in many countries because of globalisation. 
D)  production of most goods involves increasing opportunity costs.

Question 13

If a country has an absolute advantage in producing a product,it must also have a comparative advantage in producing that product.

Accepted Answer

A) True 
 B)False

Question 14

If a country has a comparative advantage in producing a product,it may not have an absolute advantage in producing that product.

Accepted Answer

A) True 
 B)False

Question 15

Table 18-4
Output per Hour of Work
   Table 18-4 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand.
-Refer to Table 18-4.
a.Which country has an absolute advantage in the production of handbags and jackets?
b.Which country has a comparative advantage in the production of handbags?
c.Which country has a comparative advantage in the production of jackets?

Accepted Answer

a.Thailand has an absolute advantage in

Question 16

a.What is the World Trade Organization?
b.When was it established?
c.How many countries are members of the World Trade Organization?

Accepted Answer

a.The World Trade Organization (WTO)is a

Question 17

Tastes for products such as beer differ.As a result

Accepted Answer

A)  we see countries specialising completely in the production of beer. 
B)  consumers of beer have difficulty deciding what type of imported beer to buy. 
C)  the quality of imported beer is less than it could be. 
D)  different countries may each have a comparative advantage in producing different types of beer. 
A)  we see countries specialising completely in the production of beer. 
B)  consumers of beer have difficulty deciding what type of imported beer to buy. 
C)  the quality of imported beer is less than it could be. 
D)  different countries may each have a comparative advantage in producing different types of beer.

Question 18

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

Accepted Answer

A)  split their time evenly between work and school. 
B)  usually have few good alternatives to work. 
C)  are only allowed to work if they have attended school up to age 15. 
D)  who work are relatively rare, as most do attend school full-time. 
A)  split their time evenly between work and school. 
B)  usually have few good alternatives to work. 
C)  are only allowed to work if they have attended school up to age 15. 
D)  who work are relatively rare, as most do attend school full-time.

Question 19

Table 18-6
Production and
Consumption Production
Without Trade With Trade
   Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.Which country has an absolute advantage in producing hats?

Accepted Answer

A)  Denmark 
B)  Belize 
C)  Both countries 
D)  Neither country 
A)  Denmark 
B)  Belize 
C)  Both countries 
D)  Neither country

Question 20

Free trade ________ living standards by ________ economic efficiency.

Accepted Answer

A)  raises; increasing 
B)  lowers; decreasing 
C)  raises; equalising 
D)  lowers; eliminating 
A)  raises; increasing 
B)  lowers; decreasing 
C)  raises; equalising 
D)  lowers; eliminating

Assume that China has a comparative advantage in producing corn and exports corn to Japan.We can conclude that

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed,it

Table 18-1 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 18-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 18-1.Select the statement that accurately interprets the data in the table.

The largest proportion of world trade is in which of the following sectors?

Distinguish between a voluntary export restraint and a quota.

Countries that engage in trade will tend to specialise in the production of goods and services in which they have and will these goods and services.

A tax imposed by a government on imports of a good into a country is called

Table 18-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

In the real world we don't observe countries completely specialising in the production of goods for which they have a comparative advantage.One reasons for this is that

If a country has an absolute advantage in producing a product,it must also have a comparative advantage in producing that product.

If a country has a comparative advantage in producing a product,it may not have an absolute advantage in producing that product.

a.What is the World Trade Organization? b.When was it established? c.How many countries are members of the World Trade Organization?

Tastes for products such as beer differ.As a result

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

Free trade living standards by economic efficiency.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 18: Fiscal Policy

Assume that China has a comparative advantage in producing corn and exports corn to Japan.We can conclude that

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed,it

Table 18-1 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 18-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 18-1.Select the statement that accurately interprets the data in the table.

The largest proportion of world trade is in which of the following sectors?

Distinguish between a voluntary export restraint and a quota.

Countries that engage in trade will tend to specialise in the production of goods and services in which they have ________ and will ________ these goods and services.

A tax imposed by a government on imports of a good into a country is called

Table 18-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

In the real world we don't observe countries completely specialising in the production of goods for which they have a comparative advantage.One reasons for this is that

If a country has an absolute advantage in producing a product,it must also have a comparative advantage in producing that product.

If a country has a comparative advantage in producing a product,it may not have an absolute advantage in producing that product.

a.What is the World Trade Organization? b.When was it established? c.How many countries are members of the World Trade Organization?

Tastes for products such as beer differ.As a result

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

Free trade ________ living standards by ________ economic efficiency.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Countries that engage in trade will tend to specialise in the production of goods and services in which they have and will these goods and services.

Free trade living standards by economic efficiency.