E201

Based upon 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

Suppose China can produce either 600 telephones or 200 DVD players, and Japan can produce either 400 telephones or 200 DVD players, Implicitly, China has

Both an absolute and a comparative advantage in DVD players

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

Consumption outside the production possibilities curve for bot 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

Workers typically require higher wages in order to work additional hours because of the

Increasing opportunity cost of labor

Suppose the production of 12 tons of copper in the United States requires the same amount of resources as the production of 3 tons of aluminum. In Mexico, 12 tons of copper requires the same amount of resources as 2 tons of aluminum. Implicitly

Mexico has a comparative advantage in producing copper

According to the In The News article "Mauer, Twins Agree to Eight- Year, $184 Million Extension," high salaries of professional baseball player are due to

A player having a high marginal revenue product?????????????????

Which of the following is not true about the demand for factors of production?

It is a function of the elasticity of supply

When the MPP of labor is zero, ceteris paribus,

No further increases in output can be achieved by using additional units of labor

Because of the law of diminishing returns, as additional workers are hired, total output

Rises at a diminishing rate initially and eventually falls

If the MPP of an additional unit of labor is 4 units per hour, product price is constant at $5 per unit, and the wage rate is $19 per hour, then

The additional unit of labor should be employed

When there are more qualified applicants than job openings, this indicates that the

Wages being offered are too high

The United States is capable of producing many goods and services that it imports, but it does not because

We can import those goods at a lower opportunity cost than if we make them ourselves

Which of the following groups has an interest in encouraging free trade?

Workers in export industries

If a chair can be sold for $20 and it takes a worker two hours to make a chair, the marginal revenue product of this worker is

$10 per hour

If the elasticity of labor is 0.60, a 15 percent increase in the wage rate will induce a

9.0 percent increase in the quantity of labor supplied

Suppose China can produce either 300 telephones or 200 DVD players, and Japan can produce either 200 telephones or 100 DVD players. Implicitly, Japan has

A comparative but not necessarily an absolute advantage in telephones

Assume the United States and Canada have the same amount of resources. In a given time period, the United States can produce 3 tons of steel or 300 tons of wheat. Canada can produce 4 tons of steel or 400 tons of wheat. This means that

Canada has an absolute advantage in both steel and wheat

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 comparative advantage

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 output of computers and soybeans would be greatest if

China specialized in producing soybeans, and the United States specialized in producing computers

If the demand for alarm clocks decreases, the effect on the alarm clock job market will be to

Decrease the demand for labor and reduce equilibrium wages

When tariffs are imposed, the losers include

Domestic consumers and foreign producers

What should happen to the equilibrium price and quantity in a market as a result of a tariff on imports?

Equilibrium price should go up, and equilibrium quantity should go down

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 specialized and trade?

Mexican coffee producers

The U.S. has an absolute advantage, not a comparative advantage, in making T-shirts, because

Other countries can produce T-shirts at a lower opportunity cost relative to the United States