Question 1

If the USA could produce 1 ton of potatoes or 0.5 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if:

Accepted Answer

A)   The USA specializes in potatoes because of its comparative advantage in producing potatoes.
B)   The USA specializes in wheat because of its absolute advantage in producing wheat.
C)   The USA specializes in wheat because of its comparative advantage in producing wheat.
D)   There can be no mutual gains from trade.

Question 2

What benefits are to be gained from countries producing according to the concept of comparative advantage? What if a country is absolutely more productive in all goods?

Accepted Answer

When countries produce according to the ...

Question 3

If a nation has a comparative disadvantage in the production of some commodity:

Accepted Answer

A)   it cannot gain from international trade unless it has an absolute advantage in every other commodity.
B)   it cannot gain from international trade in the commodity.
C)   it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically.
D)   it can gain from international trade in that commodity only if it has an absolute advantage in that commodity.

Question 4

Assume that one day's labor in Argentina can produce either 20 units of cloth or 2 units of wine, while in Chile one day's labor can produce either 24 units of cloth or 12 units of wine. If Argentina transfers 2 units of labor from wine to cloth and Chile transfers 1 unit of labor from cloth to wine, the increase in combined output by those two workers will be:

Accepted Answer

A)   16 wine; 8 cloths
B)   16 wine; 16 cloths
C)   12 wine; 12 cloths
D)   8 wine; 16 cloths

Question 5

The slope of the production possibility frontier is determined by the _______ of expanding production of one good, measured by how much of the other good would be lost.

Accepted Answer

A)   absolute advantage
B)   opportunity cost
C)   relative advantage
D)   specialization

Question 6

Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 16 units of food per year or 8 units of clothing. Which of the following is true?

Accepted Answer

A)   Georgeland has a comparative advantage, but not an absolute advantage, in producing clothing.
B)   Georgeland has both a comparative and absolute advantage in producing clothing.
C)   Alland has a comparative advantage, but not an absolute advantage, in producing food.
D)   Alland has an absolute advantage, but not comparative advantage, in producing food.

Exam 19: International Trade

Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 16 units of food per year or 8 units of clothing. Which of the following is true?

Correct Answer
verified

Correct Answer
verified

If the USA could produce 1 ton of potatoes or 0.5 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if:

Correct Answer
verified

What benefits are to be gained from countries producing according to the concept of comparative advantage? What if a country is absolutely more productive in all goods?

Correct Answer
verified
When countries produce according to the ...
View Answer

If a nation has a comparative disadvantage in the production of some commodity:

Correct Answer
verified

The slope of the production possibility frontier is determined by the _______ of expanding production of one good, measured by how much of the other good would be lost.

Correct Answer
verified

Exam 19: International Trade

Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 16 units of food per year or 8 units of clothing. Which of the following is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the USA could produce 1 ton of potatoes or 0.5 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if:

Correct AnswerverifiedShow Answer

What benefits are to be gained from countries producing according to the concept of comparative advantage? What if a country is absolutely more productive in all goods?

Correct AnswerverifiedWhen countries produce according to the ...View AnswerShow Answer

If a nation has a comparative disadvantage in the production of some commodity:

Correct AnswerverifiedShow Answer

The slope of the production possibility frontier is determined by the _______ of expanding production of one good, measured by how much of the other good would be lost.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When countries produce according to the ...
View Answer

Correct Answer
verified

Correct Answer
verified