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234. Multiple Choice: The World Trade Organization (WTO):
Question The World Trade Organization (WTO):
Answer is the primary member of NAFTA.
235. Multiple Choice: The World Trade Organization (WTO):
Question The World Trade Organization (WTO):
Answer assists importers and exporters in conducting their trade.
236. Multiple Choice: Canada, Mexico, and the United States...
Question Canada, Mexico, and the United States have:
Answer joined together and are operating in what is called a closed-trade area with
respect to the European Union.
237. Multiple Choice: When a business hires people in other...
Question When a business hires people in other countries to perform various tasks, then
________ has occurred.
Answer comparative advantage
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238. Multiple Choice: Figure: The Market for Calculators Re...
Question Figure: The Market for Calculators
Reference: Ref 8-21
(Figure: The Market for Calculators) Look at the figure The Market for Calculators.
The world price, PW, equals $100. When the economy moves from autarky to free
trade, consumer surplus rises by area ________ and producer surplus falls by
________.
Answer B + K + L; B
239. Multiple Choice: (Figure: The Market for Calculators) ...
Question (Figure: The Market for Calculators) Look at the figure The Market for Calculators.
The world price, PW, equals $100. The government imposes a quota restricting
imports to 25 calculators. The domestic price rises to ________ and the quota rent
is equal to area ________.
Answer $120; K + L
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240. Multiple Choice: (Figure: The Market for Calculators) ...
Question (Figure: The Market for Calculators) Look at the figure The Market for Calculators.
The world price, PW, equals $100. The government imposes a quota restricting
imports to 25 calculators. If import licenses are granted to foreigners, the net loss
due to the import quota is equal to areas:
Answer K + L.
241. Multiple Choice: (Figure: The Market for Calculators) ...
Question (Figure: The Market for Calculators) Look at the figure The Market for Calculators.
The world price, PW, equals $100. The government imposes an import tariff of $20
per calculator. Compared with the free trade situation, the tariff leads to a
deadweight loss equal to areas:
Answer K + L.
242. Multiple Choice: Imports are good and services that are:
Question Imports are good and services that are:
Answer sold outside of the country.
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243. Multiple Choice: Within the context of the production ...
Question Within the context of the production possibility frontier framework, if the opportunity
cost of producing either of the two goods in question is constant and does not
change, this means the production possibility frontier is:
244. Multiple Choice: Autarky is a situation in which a cou...
Question Autarky is a situation in which a country:
Answer trades with other countries based on comparative advantage.
245. Multiple Choice: The use of comparative advantage in i...
Question The use of comparative advantage in international trade:
Answer is used only by larger countries.
246. Multiple Choice: Gains from trade will result if a cou...
Question Gains from trade will result if a country specializes in:
Answer all of its goods.
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247. Multiple Choice: The belief that importing goods from ...
Question The belief that importing goods from low-wage countries will hurt the standard of
living of workers in the importing country is known as the:
Answer Heckscher–Ohlin theory.
248. Multiple Choice: Workers in China earn low wages relat...
Question Workers in China earn low wages relative to world standards. A person who believes
trade must be bad for workers in China because of this adheres to the:
theory of absolute advantage.
249. Multiple Choice: Comparative advantage arises from:
Question Comparative advantage arises from:
an emphasis on export production.
250. Multiple Choice: The model that suggests countries wil...
Question The model that suggests countries will specialize in producing the good that uses
its relatively abundant factor of production most intensively is referred to as the:
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251. Multiple Choice: Countries that trade based on the Hec...
Question Countries that trade based on the Heckscher–Ohlin model will find that:
252. Multiple Choice: A country that is relatively labor-ab...
Question A country that is relatively labor-abundant and relatively land-scarce opens to
international trade. As a result, it will find that wages:
253. Multiple Choice: Scenario: The Production of Wheat and...
Question
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Scenario: The Production of Wheat and Toys
Below is information regarding the production of two goods, wheat and toys, in
country A and country B.
Each country has a linear production possibility frontier with respect to its
production of the two goods. The numbers in each column represent the total
number of units each country could produce if it used all of its resources to produce
the good.
Reference: Ref 8-24
(Scenario: Production of Wheat and Toys) Given the information provided in this
scenario, one can determine that country A has an absolute advantage in ________
and a comparative advantage in the production of ________.
Answer toys; wheat
254. Multiple Choice: Scenario: The Production of Wheat and...
Question Scenario: The Production of Wheat and Toys
Below is information regarding the production of two goods, wheat and toys, in
country A and country B.
Each country has a linear production possibility frontier with respect to its
production of the two goods. The numbers in each column represent the total
number of units each country could produce if it used all of its resources to produce
the good.
Reference: Ref 8-24
(Scenario: Production of Wheat and Toys) Given the information provided in this
scenario, the opportunity cost of producing a unit of wheat in country B is:
Answer 75 toys.
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255. Multiple Choice: Scenario: The Production of Wheat and...
Question Scenario: The Production of Wheat and Toys
Below is information regarding the production of two goods, wheat and toys, in
country A and country B.
Each country has a linear production possibility frontier with respect to its
production of the two goods. The numbers in each column represent the total
number of units each country could produce if it used all of its resources to produce
the good.
Reference: Ref 8-24
(Scenario: Production of Wheat and Toys) Look at the information provided in this
scenario. If each country specializes in the good for which it has the comparative
advantage, then:
256. Multiple Choice: Scenario: The Production of Wheat and...
Question Scenario: The Production of Wheat and Toys
Below is information regarding the production of two goods, wheat and toys, in
country A and country B.
Each country has a linear production possibility frontier with respect to its
production of the two goods. The numbers in each column represent the total
number of units each country could produce if it used all of its resources to produce
the good.
Reference: Ref 8-24
(Scenario: Production of Wheat and Toys) Look at the information provided in this
scenario. If each country specializes in the good for which it has the comparative
advantage, then the price of wheat in terms of toys will be:
Answer between 2 units of toys and 1/3 units of toys.
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257. Multiple Choice: Scenario: The Production of Wheat and...
Question Scenario: The Production of Wheat and Toys
Below is information regarding the production of two goods, wheat and toys, in
country A and country B.
Each country has a linear production possibility frontier with respect to its
production of the two goods. The numbers in each column represent the total
number of units each country could produce if it used all of its resources to produce
the good.
Reference: Ref 8-24
(Scenario: Production of Wheat and Toys) Look at the information provided in this
scenario. If each country specializes in the good for which it has the comparative
advantage, which combination represents a maximum possible amount of total
production of the two goods given the specialization?
Answer 50 wheat and 100 toys
258. Multiple Choice: Scenario: The Production of Wheat and...
Question
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Scenario: The Production of Wheat and Toys
Below is information regarding the production of two goods, wheat and toys, in
country A and country B.
Each country has a linear production possibility frontier with respect to its
production of the two goods. The numbers in each column represent the total
number of units each country could produce if it used all of its resources to produce
the good.
Reference: Ref 8-24
(Scenario: Production of Wheat and Toys) Look at the information provided above.
The opportunity cost of producing a unit of toys in country A is:
259. Multiple Choice: Advocates of trade barriers suggest t...
Question Advocates of trade barriers suggest that barriers to trade are needed for national
security, job creation, and to:
260. Multiple Choice: Figure: The Market for Melons in Russ...
Question
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Figure: The Market for Melons in Russia
Reference: Ref 8-25
(Figure: The Markets for Melons in Russia) Look at the figure The Market for Melons
in Russia. Without trade, the country's producer surplus will equal area ________
and consumer surplus will equal area ________.
261. Multiple Choice: Figure: The Market for Melons in Russ...
Question Figure: The Market for Melons in Russia
Reference: Ref 8-25
(Figure: The Markets for Melons in Russia) Look at the figure The Market for Melons
in Russia. If the world price of melons is equal to E, Russia will:
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