econ 101 ch 9

If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada, which of the following would explain this pattern of trade? Select one: a. The opportunity cost of producing fishing poles in Canada is higher than the opportunity cost of producing bacon in Mexico. b. Mexico has a lower opportunity cost of producing bacon than Mexico and Mexico has a comparative advantage in producing fishing poles. c. Mexico has a higher opportunity cost of producing fishing poles than Canada, and Canada has a higher opportunity cost of producing bacon. d. Mexico must have an absolute advantage in producing fishing poles and Canada must have an absolute advantage in bacon.

a

If the opportunity cost of production for two goods is different between two countries , then Select one: a. trade will only benefit both countries if one can lower its opportunity costs. b. mutually beneficial trade is possible. c. only one country can be made better off by trade. d. trade cannot benefit either country.

b

Protectionism is the use of ________ to protect domestic firms from foreign competition. Select one: a. cheap labor b. trade barriers c. military force d. dumping

b

Which of the following is the best example of a quota? Select one: a. a $5,000 per-car fee imposed on all sport utility vehicles imported into the United States b. a limit imposed on the number of sport utility vehicles that the United States can import from Japan c. a tax placed on all sport utility vehicles sold in the domestic market d. a subsidy granted by the U.S. government to domestic garment manufacturers so they can compete more effectively with foreign garment manufacturers

b

A "Buy American" provision in the 2009 stimulus bill would ________ consumer surplus and ________ producer surplus for industries that produce protected products in the United States. Select one: a. decrease; decrease b. increase; increase c. decrease; increase d. increase; decrease

c

A tariff is Select one: a. a subsidy granted to importers of a vital input. b. a health and safety restriction imposed on an imported product. c. a tax imposed by a government on goods imported into a country. d. a limit placed on the quantity of goods that can be imported into a country.

c

Comparative advantage means the ability to produce a good or service Select one: a. at a higher profit level than any other producer. b. of a higher quality than any other producer. c. at a lower opportunity cost than any other producer. d. at a lower selling price than any other producer.

c

Which of the following statements is true? Select one: a. Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall. b. Although some individuals are made better off as a result of international trade, both countries may be made worse off overall. c. Each country as a whole is made better off as a result of international trade, but individuals within each country may be made worse off. d. All individuals in both countries are made better off as a result of international trade.

c

An economic principle that explains why countries produce different goods and services is Select one: a. absolute advantage. b. NAFTA. c. trade as a percentage of GDP. d. comparative advantage.

d

Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets. This statement describes the ________ argument for protectionism. Select one: a. protecting national security b. diseconomies of scale c. anti-dumping d. infant industry

d

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except Select one: a. consume a combination of goods that lies outside its own production possibilities frontier. b. increase the variety of products that it can consume with no increase in resources. c. engage in mutually beneficial trade with other nations. d. produce a combination of goods that lies outside its own production possibilities frontier.

d

You have an absolute advantage whenever you Select one: a. prefer to do one particular activity. b. are better educated than someone else. c. can produce something at a lower opportunity cost than others. d. can produce more of something than others with the same resources.

d