Question 1

What does it mean for a country to have a comparative advantage in producing a product?

Accepted Answer

A country has a comparative ad

Question 2

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
   Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many swords will Morocco consume?

Accepted Answer

A) 60 
B) 75 
C) 135 
D) 200 
A) 60 
B) 75 
C) 135 
D) 200

Question 3

Figure 7-2   Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff.
-Refer to Figure 7-2.With the tariff in place,the United States consumes

Accepted Answer

A) 18 million pounds of coffee. 
B) 20 million pounds of coffee. 
C) 26 million pounds of coffee. 
D) 38 million pounds of coffee. 
A) 18 million pounds of coffee. 
B) 20 million pounds of coffee. 
C) 26 million pounds of coffee. 
D) 38 million pounds of coffee.

Question 4

In the 1980s,Japan agreed to limit the quantity of automobiles it would export to the United States.Why did the Japanese government agree to this trade restriction?

Accepted Answer

A) Japanese automobile producers lobbied for the restrictions in order to increase the price of their exports to the United States. 
B) The Japanese government wanted to limit sales to the United States in order to make more automobiles available for Japanese consumers. 
C) The Japanese government feared that the alternative would be a tariff or quota on imports of Japanese automobiles imposed by the U.S.government. 
D) The Japanese government wanted more automobiles to be available for export to countries other than the United States. 
A) Japanese automobile producers lobbied for the restrictions in order to increase the price of their exports to the United States. 
B) The Japanese government wanted to limit sales to the United States in order to make more automobiles available for Japanese consumers. 
C) The Japanese government feared that the alternative would be a tariff or quota on imports of Japanese automobiles imposed by the U.S.government. 
D) The Japanese government wanted more automobiles to be available for export to countries other than the United States.

Question 5

a.Define the term "globalization."
b.Describe the benefits of globalization.
c.Who is likely to oppose globalization and why?

Accepted Answer

a.Globalization refers to the process of

Question 6

Pakistan has developed a comparative advantage in the production of clothing.The source of its comparative advantage in this product is

Accepted Answer

A) a favorable climate. 
B) technology. 
C) abundant supplies of natural resources. 
D) a large supply of unskilled workers. 
A) a favorable climate. 
B) technology. 
C) abundant supplies of natural resources. 
D) a large supply of unskilled workers.

Question 7

All but one of the following statements is used to justify protectionism.Which statement is not used to justify protectionism?

Accepted Answer

A) Free trade leads to higher prices for imported goods. 
B) Free trade reduces employment by driving domestic firms out of business. 
C) A country should not rely on other countries for goods that are critical to its national defense. 
D) Trade restrictions are necessary to protect new firms until they can gain experience and become more productive. 
A) Free trade leads to higher prices for imported goods. 
B) Free trade reduces employment by driving domestic firms out of business. 
C) A country should not rely on other countries for goods that are critical to its national defense. 
D) Trade restrictions are necessary to protect new firms until they can gain experience and become more productive.

Question 8

Figure 7-1   Figure 7-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

Accepted Answer

A) Q0 
B) Q1 
C) Q2 
D) Q2 - Q0 
A) Q0 
B) Q1 
C) Q2 
D) Q2 - Q0

Question 9

The terms of trade refers to

Accepted Answer

A) the rules and regulations that countries must adhere to when trading. 
B) the ratio at which a country can trade its exports for imports from other countries. 
C) the role of the government in overseeing international trade. 
D) a legal document that specifies the trade quantities agreed to by two countries. 
A) the rules and regulations that countries must adhere to when trading. 
B) the ratio at which a country can trade its exports for imports from other countries. 
C) the role of the government in overseeing international trade. 
D) a legal document that specifies the trade quantities agreed to by two countries.

Question 10

The 1994 agreement that eliminated most tariffs among the United States,Canada,and Mexico is known as

Accepted Answer

A) the Pacific Trade Association. 
B) Trade Without Borders. 
C) NAFTA. 
D) the Western Trade Union. 
A) the Pacific Trade Association. 
B) Trade Without Borders. 
C) NAFTA. 
D) the Western Trade Union.

Question 11

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
   Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 7-6.Which country has a comparative advantage in producing swords?

Accepted Answer

A) Estonia 
B) Morocco 
C) both countries 
D) neither country 
A) Estonia 
B) Morocco 
C) both countries 
D) neither country

Question 12

Figure 7-1   Figure 7-1 shows the U.S.demand and supply for leather footwear.
-Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.What will be the quantity demanded?

Accepted Answer

A) Q0 
B) Q1 
C) Q2 
D) Q2 - Q0 
A) Q0 
B) Q1 
C) Q2 
D) Q2 - Q0

Question 13

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
   Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 7-6.Which country has an absolute advantage in producing belts?

Accepted Answer

A) Estonia 
B) Morocco 
C) both countries 
D) neither country 
A) Estonia 
B) Morocco 
C) both countries 
D) neither country

Question 14

Table 7-3
   Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
-Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Celeste has a comparative advantage in making saddles. 
B) Mateo has an absolute advantage in making spurs. 
C) Mateo has a comparative advantage in making saddles. 
D) Mateo has a comparative advantage in making saddles and making spurs. 
A) Celeste has a comparative advantage in making saddles. 
B) Mateo has an absolute advantage in making spurs. 
C) Mateo has a comparative advantage in making saddles. 
D) Mateo has a comparative advantage in making saddles and making spurs.

Question 15

Table 7-6
Output per hour Production and Production
of work Consumption without Trade with Trade
   Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade.
-Refer to Table 7-6.Prior to trade,what was the opportunity cost to produce 1 sword in Morocco?

Accepted Answer

A) 1/2 of a belt 
B) 1 belt 
C) 1.5 belts 
D) 2 belts 
A) 1/2 of a belt 
B) 1 belt 
C) 1.5 belts 
D) 2 belts

Question 16

Table 7-2
   Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
-Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

Accepted Answer

A) Madison has a comparative advantage in making empanadas. 
B) Austin has a comparative advantage in making tacos. 
C) Madison has a comparative advantage in making empanadas and making tacos. 
D) Madison has a comparative advantage in making tacos. 
A) Madison has a comparative advantage in making empanadas. 
B) Austin has a comparative advantage in making tacos. 
C) Madison has a comparative advantage in making empanadas and making tacos. 
D) Madison has a comparative advantage in making tacos.

Question 17

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

Accepted Answer

A) True 
 B)False

Question 18

When Sophie,a French citizen,purchases a Dell computer in Paris that was produced in Texas,the purchase is

Accepted Answer

A) both a U.S.and a French import. 
B) a U.S.import and a French export. 
C) a U.S.export and a French import. 
D) neither an export nor an import for either country. 
A) both a U.S.and a French import. 
B) a U.S.import and a French export. 
C) a U.S.export and a French import. 
D) neither an export nor an import for either country.

Question 19

A voluntary export restraint is an agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country.

Accepted Answer

A) True 
 B)False

Question 20

Despite the Obama administration's support of the Trans-Pacific Partnership (TPP),the AFL-CIO labor union has argued that the TPP will not

Accepted Answer

A) create jobs. 
B) protect the environment. 
C) ensure safe imports. 
D) all of the above 
A) create jobs. 
B) protect the environment. 
C) ensure safe imports. 
D) all of the above

What does it mean for a country to have a comparative advantage in producing a product?

Figure 7-2 Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff. -Refer to Figure 7-2.With the tariff in place,the United States consumes

In the 1980s,Japan agreed to limit the quantity of automobiles it would export to the United States.Why did the Japanese government agree to this trade restriction?

a.Define the term "globalization." b.Describe the benefits of globalization. c.Who is likely to oppose globalization and why?

Pakistan has developed a comparative advantage in the production of clothing.The source of its comparative advantage in this product is

All but one of the following statements is used to justify protectionism.Which statement is not used to justify protectionism?

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

The terms of trade refers to

The 1994 agreement that eliminated most tariffs among the United States,Canada,and Mexico is known as

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.What will be the quantity demanded?

Table 7-3 Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

Table 7-2 Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

When Sophie,a French citizen,purchases a Dell computer in Paris that was produced in Texas,the purchase is

A voluntary export restraint is an agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country.

Despite the Obama administration's support of the Trans-Pacific Partnership (TPP),the AFL-CIO labor union has argued that the TPP will not

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 7: Comparative Advantage and the Gains From International Trade

What does it mean for a country to have a comparative advantage in producing a product?

Figure 7-2 Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff. -Refer to Figure 7-2.With the tariff in place,the United States consumes

In the 1980s,Japan agreed to limit the quantity of automobiles it would export to the United States.Why did the Japanese government agree to this trade restriction?

a.Define the term "globalization." b.Describe the benefits of globalization. c.Who is likely to oppose globalization and why?

Pakistan has developed a comparative advantage in the production of clothing.The source of its comparative advantage in this product is

All but one of the following statements is used to justify protectionism.Which statement is not used to justify protectionism?

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.What will be the domestic quantity supplied?

The terms of trade refers to

The 1994 agreement that eliminated most tariffs among the United States,Canada,and Mexico is known as

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.What will be the quantity demanded?

Table 7-3 Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

Table 7-2 Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

When Sophie,a French citizen,purchases a Dell computer in Paris that was produced in Texas,the purchase is

A voluntary export restraint is an agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country.

Despite the Obama administration's support of the Trans-Pacific Partnership (TPP),the AFL-CIO labor union has argued that the TPP will not

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters