Exam 2: The Power of Trade

The human brain has no limits,so the division of knowledge decreases the total knowledge in society.

If a country has an absolute advantage in both items produced when compared to another country,there can never be any benefit for them to trade.

One of the ways trade increases wealth is by taking advantage of differences in preferences.

Although trade increases productivity,it decreases society's collective knowledge because people specialize in a very limited number of things.

Specialization is an example of self-interest aligning with the social interest because it increases the amount you can consume as well as the amount society can consume.

Wage rates are primarily based on the:

As trade becomes more widespread,specialization ______,which in turn ______ productivity.

Trade causes wages in countries with high productivity to increase and wages in countries with low productivity to decrease.

Which of the following statements is TRUE? I.Compared with a modern economy,the division of knowledge is greater in a primitive economy because every family is self-sufficient: growing their own food,making their own clothes,and constructing their own shelter. II.Nobody understands the entire process of producing even the simplest products,like a lead pencil,in a modern economy. III.The collapse of communism and the opening of the Chinese economy to the rest of the world have increased the division of knowledge,leading to increased world output.

If the goal of education were solely to support economic growth,the ideal graduate would be a:

Evidence from history shows that when the extent of trade expands,the result is prosperity.

Jesse is good at math and excellent at making friends and Addae is equally good at both.Mathematically and socially challenged Jordan wants to hire tutors to help in each area.Who should tutor Jordan in which area to maximize Jordan's college experience?

Trade increases productivity when production is carried out by the person/group with the comparative advantage.

According to the theory of comparative advantage,a country specializes in producing goods with lower opportunity costs than in another country.

A rock carving from ancient Norway depicts two identical people doing different jobs in the same boat: one uses a bow to hunt while the other paddles.How does this early example illustrate the benefits of trade?

The recent pace of globalization has been increased through:

Use the following to answer questions Figure: PPF Mexico & United States -(Figure: PPF Mexico & United States)Use the figure in which both Mexico and the United States each have 24 units of labor.The opportunity costs of producing one computer are:

A country produces and consumes eight units of sugar cane costing $50 per unit and two iPods that cost $200 each.After specialization and trade,that country consumes eight units of sugar cane and four iPods.With 24 units of labor,what are wages in this country?

Without trade,the knowledge used by an entire economy would be about the same as the knowledge had by:

Trade allows countries to consume more than their ability to produce.