one unit of food for one unit of textiles.
somewhere between one unit of food for two units of textiles and two units of food for one unit of textiles.
one unit of food for two units of textiles.
two units of food for one unit of textiles.
References
Multiple Choice Difficulty: 2 Medium
Countries A and B currently consume 400 units of food and 400 units of textiles each and currently do with one another.
The citizens of country A have to give up one unit of food to gain two units of textiles, while the not trade citizens of
country B have to give up one unit of textiles to gain two units of food. Their production possibilities curves are shown.
Suppose that trade is allowed and that the international exchange rate between food and textiles is one-for-one. The
increased consumption following trade will be
an increase of 400 units of food and 400 units of textiles.
an increase of 1,200 units of food and 1,200 units of textiles.
an increase of 800 units of food and 800 units of textiles.
there are no gains from trade in this example.
References
Multiple Choice Difficulty: 2 Medium
74.
Award: 1.00 point
75.
Award: 1.00 point
76.
Award: 1.00 point
In modern times, it is not a country per se but rather a controller of capital and know-how that gives the country in which it
is domiciled a comparative advantage over another country. These controllers of capital and technology are
the state.
the multinational corporations (MNCs).
portfolio managers of international mutual funds.
none of the options
References
Multiple Choice Difficulty: 1 Easy
International trade is
a "zero-sum" game in which one country benefits at the expense of another country.
an "increasing-sum" game at which all players become winners.
prone to both countries being worse off than had they not participated in international trade.
none of the options
References
Multiple Choice Difficulty: 1 Easy
The doctrine of comparative advantage was first put forth by
Adam Smith.
David Ricardo.
Ricky Ricardo.
none of the options
References
Multiple Choice Difficulty: 1 Easy
77.
Award: 1.00 point
78.
Award: 1.00 point
79.
Award: 1.00 point
The comparative advantage argument in free trade
ignores the cost of readjustment.
is a short-run argument.
only works for two goods at a time.
none of the options
References
Multiple Choice Difficulty: 1 Easy
If you can make a good product at a low opportunity cost,
you would be well served to produce that good and trade for other goods.
you should make something else that has a higher value.
you should make something else that has a higher opportunity cost.
none of the options
References
Multiple Choice Difficulty: 1 Easy
A country like North Korea
likely rejects the notion of increased opportunity presented by free trade.
engages in free trade.
lies on a production possibilities curve superior to South Korea, since North Korea protects its international
producers.
none of the options
References
Multiple Choice Difficulty: 1 Easy
80.
Award: 1.00 point
81.
Award: 1.00 point
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
Which state has an absolute advantage in producing wheat in Case I?
South Dakota
North Dakota
Neither state
Both states
References
Multiple Choice Difficulty: 2 Medium
The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of
labor under two different hypothetical situations (Cases I and II).
Case I Case II
South Dakota North Dakota South Dakota North Dakota
Wheat (bushels) 4 1 3 1
Beer (bottles) 1 2 4 2
Which state has an absolute advantage in producing beer in Case I?
South Dakota
North Dakota
Neither state
Both states
References
Multiple Choice Difficulty: 2 Medium
82.
Award: 1.00 point