Chapter 19-23 (Micro)

In Figure 35.1, what is the opportunity cost of motorcycles in the United States?

1 DVD player per motorcycle.

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The opportunity cost of producing 1 computer in China is

1/3 of a ton of soybeans.

Over a given period of time, if exports are greater than imports, the result is

A trade surplus.

From a consumer's viewpoint, which of the following policies would be least desirable?

No trade.

If we add together all the gains from specialization and trade and then subtract all the losses, the net result would be

Positive: a net gain for the world and each country.

If exports are being excluded unfairly from a market, the World Trade Organization (WTO) may authorize

Retaliatory tariffs.

Based on the comparative cost ratios implied in Figure 35.2, it is clear that

The United States has a comparative advantage in baseballs and Mexico has a comparative advantage in golf shoes.

Assume the United States and Australia have the same amount of resources. In a given time period, the United States can produce 2 tons of beef or 200,000 cars. Australia can produce 1 ton of beef or 100,000 cars. This means that that

The United States has an absolute advantage in both beef and cars.

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. From the information in Table 35.1, it is clear that

The United States has an absolute advantage in both goods.

Refer to Figure 35.3 for the production possibilities curves for the United States and Mexico. These two curves indicate that

The United States has an absolute advantage in the production of both goods.

Refer to Figure 35.5. If S1 represents the U.S. domestic supply of a good and S2 represents supply in the United States under conditions of free trade, what does S3 most likely represent?

U.S. supply under tariff-restricted trade.

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The opportunity cost of producing 1 ton of soybeans in the United States is

5 computers.

Which of the following is a gain from trade?

A higher standard of living for all trading countries.

An embargo is

A prohibition on exports or imports.

If a country engages in trade with other countries, it is known as

An open economy.

Suppose the country of Maverick has specialized in the production of a good but has not yet entered into trade. At this point in time, Maverick has

Moved along its existing production possibilities curve.

Which of the following countries has the highest export ratio?

Belgium

Suppose China can produce 200 TVs or 200 DVD players. South Korea can produce either 100 TVs or 200 DVD players. In terms of TV production we can conclude that

China has a comparative advantage.

If the terms of trade between any two countries lie somewhere between their respective opportunity costs, then the effects of trade will include

Consumption outside the production possibilities curve for both countries.

When a country has a lower opportunity cost in producing a good than any other country,

Consumption possibilities will increase with specialization and trade.

Which of the following countries has the lowest export ratio?

Myanmar

Goods and services sold to foreign buyers are

Exports

Suppose that Brazil has a comparative advantage in coffee and Mexico has a comparative advantage in tomatoes. Which of the following groups would be worse off if these countries specialize and trade?

Mexican coffee producers.

If U.S. quotas on imported sugar were eliminated,

The supply of sugar in the United States would shift to the right and sugar prices would fall.

Two countries with differing comparative advantages may engage in trade because

They will be able to consume more goods in total due to specialization and trade.