ECON 5311 - chapter 9 quiz

The following table shows the hourly output per worker measured as quarts of olive oil and pounds of pasta in Greece and​ Italy: Outputs per hour of work Greece - Olive Oil: 2, Pasta: 1 Italy - Olive Oil: 3, Pasta: 6 A) The opportunity cost of producing one more quart of olive oil in Greece is ______ pounds of pasta. B) The opportunity cost of producing one more quart of olive oil in Italy is ______ pounds of pasta. ​ C) The opportunity cost of producing one more pound of pasta in Greece is ______ quarts of olive oil. ​ D) The opportunity cost of producing one more pound of pasta in Italy is ______ quarts of olive oil.

A) 0.5 B) 2 C) 2 D) 0.5

All of the following are sources of comparative advantage except A. a strong foreign currency exchange rate. B. technology. C. relative abundance of labor and capital. D. climate and natural resources.

A. a strong foreign currency exchange rate.

We do not see complete specialization in the real world because A. not all goods and services are traded​ internationally, production of most goods involves increasing opportunity​ costs, and tastes for products differ. B. not all goods and services are traded​ internationally, production of most goods involves constant opportunity​ costs, and tastes for products are remarkably uniform. C. not all goods and services are traded​ internationally, production of most goods involves decreasing opportunity​ costs, and tastes for products differ. D. all goods and services are traded​ internationally, production of most goods involves increasing opportunity​ costs, and tastes for products are remarkably uniform.

A. not all goods and services are traded​ internationally, production of most goods involves increasing opportunity​ costs, and tastes for products differ.

A tariff A. makes both domestic producers and consumers worse off. B. makes domestic consumers worse off. C. makes everyone better off. D. makes domestic producers worse off.

B. makes domestic consumers worse off.

​_____ is a situation in which a country does not trade with other countries. The​ _____ is the ratio at which a country can trade its exports for imports from other countries. A. Terms of​ trade, autarky B. Oikonomia, prices C. Autarky, terms of trade D. Plutarky, price ratio

C. Autarky, terms of trade

Countries that engage in trade will tend to specialize in the production of goods and services in which they have​ ________ and will​ ________ these goods and services. A. an absolute​ advantage; export B. an absolute​ advantage; import C. a comparative​ advantage; export D. a comparative​ advantage; import

C. a comparative​ advantage; export

You and your neighbor pick apples and cherries. If you can pick apples at a lower opportunity cost than your​ neighbor, which of the following statements is​ true? A. You have a comparative advantage in picking apples. B. Your neighbor is better off specializing in picking cherries. C. You can trade some of your apples for some of your​ neighbor's cherries, and both of you will end up with more of both fruit. D. All of the above.

D. All of the above.

By​ trading, countries are able to consume more than they could without trade. This outcome is possible because A. world production of both goods increases after trade. B. shifting production to the more efficient country - the one with the comparative advantage - increases total production. C. inefficiencies in resource allocation are reduced. D. all of the above.

D. all of the above.

Comparative advantage A. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a higher opportunity cost than competitors. B. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a higher absolute cost than competitors. C. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower absolute cost than competitors. D. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower opportunity cost than competitors.

D. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower opportunity cost than competitors.

What is the difference between absolute advantage and comparative​ advantage? __________ advantage is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower opportunity cost than competitors. While ________ advantage is the ability of an​ individual, a​ firm, or a country to produce more of a good or service than competitors when using the same amount of resources. A country will always be an exporter of a good where it has _______ advantage in production.

comparative absolute a comparative

The United States is____________ in the world. International trade remains __________ to the United States than it is to most other countries.

one of the largest exporters less important