Econ Exam 3 Practice

The United States must give up the production of 1,000 bicycles to produce 200 additional lawn mowers. The opportunity cost of producing 100 bicycles is _______ lawn mowers

20

The principle of comparative advantages applies to interactions

between people as well as in business production decisions

Russia and Kazakhstan both produce horse and oil_______ can benefit from trading horse oil with each other.

both countries

Marginal benefit minus price equal

consumer surplus

IS Bishan wants to capitalize on comparative advantages in his life, then he should:

do more what he is relatively good at and then trade for other things

If France levies tariffs on American goods entering France, in the short run, this will tend to______ American producers and _______ French producers

harm; benefit

The maximus Gab is willing to spend on a sculpture is $15,000. The sculptor sold Gabriel the sculpture for $10,000. What is Gabriel's consumer surplus?

$5,000

If Japan must give up the production of 100 computers to produce 25 additional cellular telephones, the opportunity cost of producing four cellular telephones is _______ computers

16

The price of a cup of coffee goes up. This communicates to Stella that coffee has become more valuable. Price is functioning as:

A signal

A person is said to have a ______ in the production of a good if it can produce that good____.

Comparative advantages; at a lower opportunity cost than another person

If a country's domestic price of a good i below the world price of the good, then with trade, the domestic quantity supplied of the good will be ________ the domestic quantity demanded

Greater than

trade can be beneficial to trading partners because:

It enables more goods and services to be obtained at a lower opportunity cost

In 2015, Donald trump stated," When did we beat Japan at anything? They send their cars over here by the millions, and what do we do? When was the last time you saw a Chevy in Tokyo? It doesn't exist, folks." Trump argument fails to address which of the following economic arguments

Japan may have a comparative advantage in manufacturing cars, but the United States has a comparative advantages in other goods. which it exports to Japan.

Arianna bought all night poems, Leticia can write 10 poems and Isabella can write five. If they spend all night making necklaces, Leticia can make six ans Isabella can make four. We know that:

Leticia's opportunity cost of writing poems is less than Isabella"s

Which of the following statement is TRUE regarding comparative advantage and absolute advantage?

People can have a comparative without having an absolute advantage in a task.

Which is common argument for trade protection

The job creation argument

Katie is much faster than her husband, Brett at putting up a tent and starting a fire. Who would take care of these tasks on their camping trip if they want to maximize their time setting around a campfire?

They each have a comparative advantages in a particular task, and they should focus on doing that. Katie can help Brett when she finishes her task.

"the current trade deficit is $350 billion" This statement:

is positive

Which statement TRUE?

it is possible to have no absolute advantage but a comparative advantage in the production of some good.

Markets distribute production across companies in a way that:

minimizes cost

Prices in currency futures market and bond markets provide

predictions of future exchange rate and inflation rates

The producer surplus on a unit sold equals

price minus marginal cost

If a country has the comparative advantage in producing lumber,then with free trade:

producer surplus in the market for lumber will increase