Question 1

According to the principle of comparative advantage, worldwide output and consumption levels will be highest when goods are produced in nations where:

Accepted Answer

A)  domestic opportunity costs are lowest.
B)  inflation rates are low.
C)  the balance of trade is in a surplus position.
D)  the exchange rate is falling.E) C) and D)
F) All of the above

Question 2

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Accepted Answer

A) True 
 B)False

Question 3

The graph below shows the production possibility curves for two hypothetical nations, Orin and Pohl, which each make two hypothetical products, jaxs and keps.Which of the following statements is correct?

Accepted Answer

A)  Orin has a comparative advantage in both jaxs and keps.
B)  Pohl has a comparative advantage in jaxs.
C)  The opportunity cost of making jaxs is lower in Orin than in Pohl.
D)  Orin is more efficient than Pohl.E) All of the above
F) B) and D)

Question 4

The World Trade Organization was established by Canada to advocate strategic trade policy.

Accepted Answer

A) True 
 B)False

Question 5

The principle of comparative advantage is that total output will be greatest when each good is produced by that nation which has the lowest domestic opportunity cost.

Accepted Answer

A) True 
 B)False

Question 6

d and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt or an import quota of wy will: A) have the same effect on the volume of imports. B) have the same effect on domestic price. C) have the same effect on the revenues of domestic producers. D) do all of the above." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt or an import quota of wy will:

Accepted Answer

A)  have the same effect on the volume of imports.
B)  have the same effect on domestic price.
C)  have the same effect on the revenues of domestic producers.
D)  do all of the above.E) B) and C)
F) A) and D)

Question 7

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are, 60X and 40Y.Refer to the above information.Alpha should specialize in Y and Beta in X.

Accepted Answer

A) True 
 B)False

Question 8

Refer to the above diagram pertaining to two nations and a specific product.In equilibrium, the nation represented by lines FA and FC will:

Accepted Answer

A)  export H to the country represented by lines GB and GD.
B)  import H from the country represented by lines GB and GD.
C)  pay price F for its imports.
D)  receive price G for its exports.E) B) and D)
F) C) and D)

Exam 17: B: International Trade

Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product.S_d + Q is the product supply curve after an import quota is imposed.A tariff of P_cP_t or an import quota of wy will:

Correct Answer
verified

The principle of comparative advantage is that total output will be greatest when each good is produced by that nation which has the lowest domestic opportunity cost.

Correct Answer
verified

The graph below shows the production possibility curves for two hypothetical nations, Orin and Pohl, which each make two hypothetical products, jaxs and keps.Which of the following statements is correct?

Correct Answer
verified

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Correct Answer
verified

Refer to the above diagram pertaining to two nations and a specific product.In equilibrium, the nation represented by lines FA and FC will:

Correct Answer
verified

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are, 60X and 40Y.Refer to the above information.Alpha should specialize in Y and Beta in X.

Correct Answer
verified

According to the principle of comparative advantage, worldwide output and consumption levels will be highest when goods are produced in nations where:

Correct Answer
verified

The World Trade Organization was established by Canada to advocate strategic trade policy.

Correct Answer
verified

Exam 17: B: International Trade

Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product.Sd + Q is the product supply curve after an import quota is imposed.A tariff of PcPt or an import quota of wy will:

Correct AnswerverifiedShow Answer

The principle of comparative advantage is that total output will be greatest when each good is produced by that nation which has the lowest domestic opportunity cost.

Correct AnswerverifiedShow Answer

The graph below shows the production possibility curves for two hypothetical nations, Orin and Pohl, which each make two hypothetical products, jaxs and keps.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

International trade based on the principle of comparative advantage creates a more efficient allocation of world economic resources.

Correct AnswerverifiedShow Answer

Refer to the above diagram pertaining to two nations and a specific product.In equilibrium, the nation represented by lines FA and FC will:

Correct AnswerverifiedShow Answer

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are, 60X and 40Y.Refer to the above information.Alpha should specialize in Y and Beta in X.

Correct AnswerverifiedShow Answer

According to the principle of comparative advantage, worldwide output and consumption levels will be highest when goods are produced in nations where:

Correct AnswerverifiedShow Answer

The World Trade Organization was established by Canada to advocate strategic trade policy.

Correct AnswerverifiedShow Answer

Refer to the above diagram, where S_d and D_d are the domestic supply and demand for a product and P_c is the world price of that product.S_d + Q is the product supply curve after an import quota is imposed.A tariff of P_cP_t or an import quota of wy will:

Correct Answer
verified

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