Econ Final Part 2

Which of the following is not​ true?

Import restrictions will not elicit retaliation.

Jose can wash, fold, and iron a basket of laundry in two hours and prepare a meal in one hour. His roommate Roberto can wash, fold, and iron a basket of laundry in three hours and prepare a meal in one hour. The absolute advantage in laundry is held by The comparative advantage in meal preparation is held by

Jose. Roberto.

Monica has an absolute advantage in cooking and Ross has an absolute advantage in dishwashing. Assuming that the population consists only of Monica and Ross, we know that

Monica has a comparative advantage in cooking and Ross has a comparative advantage in dishwashing.

When people make​ choices, they attempt to maximize benefits net of opportunity cost. (17)

True (17)

When nations specialize in an area of comparative advantage and then trade with the rest of the​ world, the average standard of living in the world rises. (2)

True (2)

The division of labor increases the output of society by

allowing resources to specialize in the tasks for which they have a comparative advantage.

Specialization of labor and trade yield greater economic efficiency when applied to interstate​ trade,

and when applied to international trade.

The ability to produce more output at a lower opportunity cost than other producers is

comparative advantage.

The productivity gains achieved by specialization are due to

comparative advantage.

One main difference between tariffs and quotas is that

consumers can import any amount of the imports that have tariffs placed on​ them, but they are restricted to a set maximum amount they can import for goods subject to quotas.

Reducing a tariff ___________ the domestic production of a good.

decreases

If a firm in China sells its product in the U.S. at a price below its cost of​ production, the firm is said to be

dumping its goods in the U.S. market.

Ultimately, imports are paid for by

exports.

In the long​ run, imports are paid for by exports because

for the most​ part, foreigners want U.S. produced goods in exchange for the goods that are shipped to the United States.

If import restrictions remain in effect after an infant industry becomes competitive in the domestic​ market, consumers in this domestic market will pay a price which is​ ________ the world price for the product.

higher than

Canada goes to considerable lengths to protect its television program and magazine producers from U.S. competitors. The United States often seeks protection from food imports from Canada. From an economywide​ viewpoint, these efforts are

misguided because the enhanced output from specialization based upon comparative advantage is restricted.

The United States economy is considered by the Institute for Management Development to be the most competitive economy because

of widespread entrepreneurship.

With specialization and​ trade,

production and output for each trading partner will exceed that without trade.

During the Great Depression of the​ 1930s, many industrial countries tried protecting domestic jobs by imposing tariffs. According to economic​ theory, the likely outcome would be

reduced exports and volume of trade for everyone.

The division of productive activities among persons and regions so that no one individual or region is totally​ self-sufficient is known as

specialization.

One reason why​ "protecting domestic​ jobs" is a poor argument against free trade is because

studies have shown that when imports increase, unemployment falls

If a country has a comparative advantage in the production of some good then

that country can produce the good at a lower opportunity cost compared to other producers.

If a country has an absolute advantage in the production of some good then

that country has the ability to produce more output from given inputs of resources than other producers can.

The main international institution created in 1947 to improve trade among nations was

the General Agreement on Tariffs and Trade.

According to the Swiss Institute for Management​ Development, the top country in terms of overall productive efficiency is

the United States.

When Adam​ Smith's ten pin workers​ specialized, they were able to increase the output of pins in a day from 200 to​ 48,000. One reason for the increase in pin production was due to

the mastery each worker achieved over his assigned task.

The division of labor refers to

workers being assigned specific tasks.

Ellen can make 7 quarts of ice cream or 1 cherry cobbler in one hour. James can make 5 quarts of ice cream or 1 cherry cobbler in one hour. Based on this information, which of the following is a true statement?

Ellen has a comparative advantage in making ice cream.

Which of the following statements is​ true?

Everyone can benefit when people specialize where they have a comparative advantage and then trade with each other.

Dumping occurs when a company exports​ low-quality or obsolete products to another country. (1) Per-unit subsidies provided by foreign governments to foreign firms​ ________ total domestic market​ supply, which​ ________ the domestic price of the subsidized foreign product.

False (1) increase; depresses

A regional trade bloc prevents nations from trading with other nations within their geographic area. (11) The shifting of trade from countries outside a regional trade bloc to nations within a bloc is known as

False (11) trade diversion.

Comparative advantage is the ability to produce a good or service at a higher opportunity cost compared to other producers. (34)

False (34)

Division of labor refers to the segregation of resources into different specific tasks.

True

Which of the following restrictions on international trade sets a maximum allowable amount of a commodity that can be​ imported?

A quota.

When a country protects an infant industry in the hope that it will become efficient enough to compete effectively in the world market

A. consumers in that country lose if they continue to pay a price higher than the world price for the good in question. B. the​ import-restricting arrangements often remain after the time period allotted for the industry to mature. C. the stockholders of companies in the infant industry gain when they are protected from world competition. All of the Above

Specialization and comparative advantage

A. lead to international trade and overall gains for the nations involved. Your answer is not correct. B. lead to greater output even if you can do everything better than someone else. C. lead to greater productivity. All of the above.

What is the difference between absolute advantage and comparative​ advantage?

Absolute advantage is when someone can produce more of a good using a given quantity of inputs while comparative advantage is when someone can produce a good at a lower opportunity cost.

Which of the following is consistent with international trade​ theory?

The standard of living within a country is a function of the strength of the economy and not of its relative position.

Which of the following statements is true about the importance of international trade in the world​ economy?

Trade accounts for an increasingly higher share of a​ country's economic activity.