Question 1

Table 1 shows the units of output a worker can produce per month in Australia and Korea. ?
  Food  Electronics  Australia 205 Korea 82\begin{array}{|l|l|l|}\hline & 	ext { Food } & 	ext { Electronics } \\hline 	ext { Australia } & 20 & 5 \\hline 	ext { Korea } & 8 & 2 \\hline\end{array} Australia  Korea ​ Food 208​ Electronics 52​​ 
?
Refer to table 1. Which of the following statements about absolute advantage is true?

Accepted Answer

A)   Australia has an absolute advantage in the production of food while Korea has an absolute advantage in the production of electronics.
B)   Korea has an absolute advantage in the production of food while Australia has an absolute advantage in the production of electronics.
C)   Australia has an absolute advantage in the production of both food and electronics.
D)   Korea has an absolute advantage in the production of both food and electronics. E) None of the above
F) B) and D)

Question 2

When a country allows trade and exports a good,

Accepted Answer

A)   domestic consumers are better off, domestic producers are worse off, and the nation is worse off because the losses of the losers exceed the gains of the winners.
B)   domestic consumers are better off, domestic producers are worse off, and the nation is better off because the gains of the winners exceed the losses of the losers.
C)   domestic producers are better off, domestic consumers are worse off, and the nation is worse off because the losses of the losers exceed the gains of the winners.
D)   domestic producers are better off, domestic consumers are worse off, and the nation is better off because the gains of the winners exceed the losses of the losers.E) None of the above
F) A) and D)

Question 3

Exhibit 3  ​ Refer to Exhibit 3. The deadweight loss from the tariff is the

Accepted Answer

A)   Area D + F
B)   Area E
C)   Area D + E + F
D)   Area B + D + E + F
E)   Area BF) B) and D)
G) B) and C)

Question 4

Table 1 shows the units of output a worker can produce per month in Australia and Korea. ?
  Food  Electronics  Australia 205 Korea 82\begin{array}{|l|l|l|}\hline & 	ext { Food } & 	ext { Electronics } \\hline 	ext { Australia } & 20 & 5 \\hline 	ext { Korea } & 8 & 2 \\hline\end{array} Australia  Korea ​ Food 208​ Electronics 52​​ 
Refer to table 1. The opportunity cost of 1 unit of food in Australia is

Accepted Answer

A)   1/5 of a unit of electronics.
B)   5 units of electronics.
C)   4 units of electronics.
D)   1/4 of a unit of electronics. E) A) and D)
F) B) and C)

Question 5

Which of the following will not shift a country's production possibilities frontier outward?

Accepted Answer

A)   an advance in technology
B)   an increase in the labour force
C)   an increase in the capital stock
D)   a reduction in unemploymentE) C) and D)
F) B) and C)

Question 6

Felipe is a tax accountant. He receives €100 per hour doing tax returns. He can type 10,000 characters per hour into spreadsheets. He can hire an assistant who types 2,500 characters per hour into spreadsheets. Which of the following statements is true?

Accepted Answer

A)   none of these answers.
B)   Felipe should hire the assistant as long as he pays the assistant less than €25 per hour.
C)   Felipe should not hire an assistant because the assistant cannot type as fast as he.
D)   Felipe should hire the assistant as long as he pays the assistant less than €100 per hour.E) All of the above
F) A) and D)

Question 7

Exhibit 2  ​ Refer to Exhibit 2. The gains from trade correspond to the

Accepted Answer

A)   Area B
B)   Area D
C)   Area C
D)   Area B + D
E)   Area AF) B) and C)
G) A) and C)

Question 8

If a nation has a comparative advantage in the production of a good it,

Accepted Answer

A)   can produce that good at a lower opportunity cost than its trading partner.
B)   can benefit by restricting imports of that good.
C)   can produce that good using fewer resources than its trading partner.
D)   must be the only country with the ability to produce that good.E) B) and C)
F) A) and C)

Question 9

Exhibit 3  ​ Refer to Exhibit 3. If free trade is allowed, consumer surplus is the

Accepted Answer

A)   Area A + B + C + D + E + F + G
B)   Area A + B
C)   Area A + B + C + D + E + F
D)   Area A
E)   Area A + B + CF) A) and B)
G) A) and E)

Question 10

Julia can fix a meal in 1 hour, and her opportunity cost of one hour is €50. Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is €20. Will both Julia and Jacque be better off if she pays him €45 per meal to fix her meals? Explain.

Accepted Answer

Since Julia's opportunity cost...

Question 11

How does an import quota differ from an equivalent tariff?

Accepted Answer

Both the import quota and the tariff rai...

Question 12

When a country allows trade and imports a good,

Accepted Answer

A)   domestic producers are worse off, domestic consumers are better off, and the nation is worse off because the losses of the losers exceed the gains of the winners.
B)   domestic consumers are worse off, domestic producers are better off, and the nation is worse off because the losses of the losers exceed the gains of the winners.
C)   domestic producers are worse off, domestic consumers are better off, and the nation is better off because the gains of the winners exceed the losses of the losers.
D)   domestic consumers are worse off, domestic producers are better off, and the nation is better off because the gains of the winners exceed the losses of the losers.E) A) and D)
F) None of the above

Question 13

A tariff raises the price of a good, reduces the domestic quantity demanded, increases the domestic quantity supplied, and increases the quantity imported.

Accepted Answer

A) True 
 B)False

Question 14

Points on the production possibilities frontier are

Accepted Answer

A)   inefficient.
B)   normative.
C)   unattainable.
D)   efficient.
E)   equitable.F) A) and E)
G) B) and D)

Question 15

What are the arguments in favour of trade restrictions, and what are the counterarguments? According to most economists, do any of these arguments really justify trade restrictions? Explain.

Accepted Answer

Arguments mentioned in the text include ...

Question 16

If Italy has an absolute advantage in the production of an item, it must also have a comparative advantage in the production of that item.

Accepted Answer

A) True 
 B)False

Question 17

Exhibit 2  ​ Refer to Exhibit 2. If free trade is allowed, producer surplus is the

Accepted Answer

A)   Area B + C + D
B)   Area A + B + C
C)   Area B + C
D)   Area A + B + C + D
E)   Area CF) A) and E)
G) C) and D)

Question 18

Opponents of free trade often argue that free trade destroys domestic jobs.

Accepted Answer

A) True 
 B)False

Question 19

Table 1 shows the units of output a worker can produce per month in Australia and Korea. ?

Food  Electronics  Australia 205 Korea 82\begin{array}{|l|l|l|}\hline & 	ext { Food } & 	ext { Electronics } \\hline 	ext { Australia } & 20 & 5 \\hline 	ext { Korea } & 8 & 2 \\hline\end{array} Australia  Korea ​ Food 208​ Electronics 52​​ 
?
Refer to table 1. The opportunity cost of 1 unit of electronics in Australia is

Accepted Answer

A)   4 units of food.
B)   5 units of food.
C)   1/5 of a unit of food.
D)   1/4 of a unit of food. E) B) and C)
F) None of the above

Question 20

If free trade is allowed, a country will export a good if the world price is

Accepted Answer

A)   above the before-trade domestic price of the good.
B)   below the before-trade domestic price of the good.
C)   equal to the before-trade domestic price of the good.
D)   equal to the price elasticity of supply of the goodE) A) and B)
F) A) and C)

Exam 19: Interdependence and the Gains From Trade

Felipe is a tax accountant. He receives €100 per hour doing tax returns. He can type 10,000 characters per hour into spreadsheets. He can hire an assistant who types 2,500 characters per hour into spreadsheets. Which of the following statements is true?

Correct Answer
verified

When a country allows trade and imports a good,

Correct Answer
verified

Exhibit 3 Refer to Exhibit 3. If free trade is allowed, consumer surplus is the

Correct Answer
verified

If a nation has a comparative advantage in the production of a good it,

Correct Answer
verified

Exhibit 2 Refer to Exhibit 2. If free trade is allowed, producer surplus is the

Correct Answer
verified

A tariff raises the price of a good, reduces the domestic quantity demanded, increases the domestic quantity supplied, and increases the quantity imported.

Correct Answer
verified

What are the arguments in favour of trade restrictions, and what are the counterarguments? According to most economists, do any of these arguments really justify trade restrictions? Explain.

Correct Answer
verified
Arguments mentioned in the text include ...
View Answer

Exhibit 3 Refer to Exhibit 3. The deadweight loss from the tariff is the

Correct Answer
verified

How does an import quota differ from an equivalent tariff?

Correct Answer
verified
Both the import quota and the tariff rai...
View Answer

Which of the following will not shift a country's production possibilities frontier outward?

Correct Answer
verified

Opponents of free trade often argue that free trade destroys domestic jobs.

Correct Answer
verified

When a country allows trade and exports a good,

Correct Answer
verified

Julia can fix a meal in 1 hour, and her opportunity cost of one hour is €50. Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is €20. Will both Julia and Jacque be better off if she pays him €45 per meal to fix her meals? Explain.

Correct Answer
verified
Since Julia's opportunity cost...
View Answer

Correct Answer
verified

Points on the production possibilities frontier are

Correct Answer
verified

If free trade is allowed, a country will export a good if the world price is

Correct Answer
verified

Correct Answer
verified

If Italy has an absolute advantage in the production of an item, it must also have a comparative advantage in the production of that item.

Correct Answer
verified

Correct Answer
verified

Exhibit 2 Refer to Exhibit 2. The gains from trade correspond to the

Correct Answer
verified

Exam 19: Interdependence and the Gains From Trade

Felipe is a tax accountant. He receives €100 per hour doing tax returns. He can type 10,000 characters per hour into spreadsheets. He can hire an assistant who types 2,500 characters per hour into spreadsheets. Which of the following statements is true?

Correct AnswerverifiedShow Answer

When a country allows trade and imports a good,

Correct AnswerverifiedShow Answer

Exhibit 3 ​ Refer to Exhibit 3. If free trade is allowed, consumer surplus is the

Correct AnswerverifiedShow Answer

If a nation has a comparative advantage in the production of a good it,

Correct AnswerverifiedShow Answer

Exhibit 2 ​ Refer to Exhibit 2. If free trade is allowed, producer surplus is the

Correct AnswerverifiedShow Answer

A tariff raises the price of a good, reduces the domestic quantity demanded, increases the domestic quantity supplied, and increases the quantity imported.

Correct AnswerverifiedShow Answer

What are the arguments in favour of trade restrictions, and what are the counterarguments? According to most economists, do any of these arguments really justify trade restrictions? Explain.

Correct AnswerverifiedArguments mentioned in the text include ...View AnswerShow Answer

Exhibit 3 ​ Refer to Exhibit 3. The deadweight loss from the tariff is the

Correct AnswerverifiedShow Answer

How does an import quota differ from an equivalent tariff?

Correct AnswerverifiedBoth the import quota and the tariff rai...View AnswerShow Answer

Which of the following will not shift a country's production possibilities frontier outward?

Correct AnswerverifiedShow Answer

Opponents of free trade often argue that free trade destroys domestic jobs.

Correct AnswerverifiedShow Answer

When a country allows trade and exports a good,

Correct AnswerverifiedShow Answer

Julia can fix a meal in 1 hour, and her opportunity cost of one hour is €50. Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is €20. Will both Julia and Jacque be better off if she pays him €45 per meal to fix her meals? Explain.

Correct AnswerverifiedSince Julia's opportunity cost...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Points on the production possibilities frontier are

Correct AnswerverifiedShow Answer

If free trade is allowed, a country will export a good if the world price is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If Italy has an absolute advantage in the production of an item, it must also have a comparative advantage in the production of that item.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Exhibit 2 ​ Refer to Exhibit 2. The gains from trade correspond to the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Exhibit 3 Refer to Exhibit 3. If free trade is allowed, consumer surplus is the

Correct Answer
verified

Correct Answer
verified

Exhibit 2 Refer to Exhibit 2. If free trade is allowed, producer surplus is the

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Arguments mentioned in the text include ...
View Answer

Exhibit 3 Refer to Exhibit 3. The deadweight loss from the tariff is the

Correct Answer
verified

Correct Answer
verified
Both the import quota and the tariff rai...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Since Julia's opportunity cost...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Exhibit 2 Refer to Exhibit 2. The gains from trade correspond to the

Correct Answer
verified