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Chapter 20 - International Trade
1. A trade deficit refers to a situation where:
2. Which nation had the largest share of world exports in 2009?
Chapter 20 - International Trade
3. In the United States, exports of goods and services account for about what percentage of
GDP (total output) in 2008?
4. Which country is the United States' largest trading partner in terms of volume of trade?
5. About what percentage of the world's total exports comes from the United States?
Chapter 20 - International Trade
6. Which of the following product-groups is a leading export of the United States?
7. Which of the following products is a leading import of the United States?
8. In 2009, U.S. exports of services ______ U.S. imports of services by about _____.
Chapter 20 - International Trade
9. Most of the trade of the United States is with:
10. Which nation has greatly increased its role in international trade in recent years?
11. In which of the following nations do exports account for the biggest percentage of GDP in
2008?
Chapter 20 - International Trade
12. Benefits from trade among nations are based on the following differences, except:
13. The best example of a labor-intensive commodity is:
14. A natural-resource abundant nation would be expected to export a land-intensive
commodity such as:
Chapter 20 - International Trade
15. What other economic process tends to accompany international trade, for nations to
benefit from such trade?
16. A basic assumption for comparing the production possibilities curves of two nations is
that those possibilities curves reflect differences in:
17. The slopes of the production possibilities curves for two nations reflect the:
Chapter 20 - International Trade
18. The ratio at which nations will exchange one product for another is known as the:
19. Specialization and trade between individuals or between nations lead to:
20. If two nations have identical production possibilities curves with constant costs, then one
nation would have:
Chapter 20 - International Trade
21. If there is no comparative advantage between two countries:
22. Consider two countries which trade with each other. The degree of specialization
according to their respective comparative advantages will be greater if the countries face:
23. The principle of comparative advantage indicates that mutually beneficial international
trade can take place only when:
Chapter 20 - International Trade
24. Nation X has a comparative advantage in the production of a product compared to Nation
Y when:
25. In a two-nation world, comparative advantage means that one nation can produce:
26. In a two-nation world, if country A has a comparative advantage in the production of good
X over country B, then country A:
Chapter 20 - International Trade
27. The benefits to trading nations based on comparative advantage accrue from:
28. The principal concept behind comparative advantage is that a nation should:
29. Specialization and trade based on comparative advantage allow nations to attain the
following results, except:
Chapter 20 - International Trade
30. The domestic opportunity cost of producing a television in the United States is 20 bushels
of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of
wheat. In this case:
31. The domestic opportunity cost of producing 100 barrels of chemicals in Germany is one
ton of steel. In France, the domestic opportunity cost of producing 100 barrels of chemicals is
two tons of steel. In this case:
Chapter 20 - International Trade
32. Nation A pays lower wages to workers than Nation B. Nation A also uses fewer capital
goods per worker than Nation B. This suggests that gains from trade are likely to result if:
33. Nation Statum can produce either 800 units of chemicals or 1,600 units of clothing.
Nation Timin can produce either 200 units of chemicals or 800 units of clothing
Chapter 20 - International Trade
34. The production possibilities for country X are either 6,000 bushels of soybeans or 10,000
bushels of wheat. The production possibilities for country Y are either 2,000 bushels of
soybeans or 4,000 bushels of wheat. Which of the following is true?
35. Countries A and B produce only rubber bands and paper clips under the production
possibilities schedules shown below:
In country A the opportunity cost of 1 paper clip is:
Chapter 20 - International Trade
36. Given the following production possibilities schedules, it can be deduced that:
37. Given the following production alternatives for Brazil and Poland, it can be seen that if
the two nations open up trade with each other, then:
Chapter 20 - International Trade
38. The table below shows labor-productivity figures in two countries facing constant costs.
Based on the data provided, it can be deduced that:
39. The production possibilities table given below shows how many bushels of either wheat or
rice can be produced in India and Canada with 1 unit of input. To achieve gains from
specialization:
Chapter 20 - International Trade
40. Nation Alpha has a comparative advantage in product X and nation Beta has a
comparative advantage in product Y. Trade in the two products will only benefit the two
nations if:
Chapter 20 - International Trade
41. The graph above shows the production possibilities curves for two hypothetical nations,
Orin and Pohl, which each make two hypothetical products, jaxs and keps. Which of the
following statements is correct?
42. Nations Quirk and Turk can produce aluminum or oil in the following maximum
quantities when all their resources are fully devoted to either product.
Which one of the following terms of trade is most likely to produce mutually-beneficial
exchange between the two nations?
Chapter 20 - International Trade
43. In Germany, one worker can produce either one cuckoo clock or one beer mug. In
Taiwan, one worker can produce either two cuckoo clocks or three beer mugs. Who has the
comparative advantage in each good?
Chapter 20 - International Trade
44. Refer to the above graphs and information. It can be deduced that:
45. Refer to the above graphs and information. If Italy and Greece should open up trade with
each other, which of the following terms of trade is mutually beneficial?
46. Refer to the above graphs and information. The assumption made about the domestic
production opportunity costs in both countries is that they are:
Chapter 20 - International Trade
47. Refer to the above diagrams and information. Assume that prior to specialization and
trade, Italy and Greece preferred points I and G on their respective production possibilities
curves. As a result of complete specialization according to comparative advantage, the
resulting gains in total output will be:
Answer the question based on the data provided in the tables below for two hypothetical
nations, Wat and Xat. The nations have the production possibilities for rice and corn given in
the following table:
48. Refer to the above data. Which of the following statements is true?
