HW#4

If the United States can produce 30 computers for every car it produces and Japan can produce 15 computers for every car it produces, _____ has the _____ advantage in car production. the United States; comparative Japan; comparative the United States; absolute Japan; absolute

Japan; comparative

Sri Lanka's comparative advantage over the United States in textiles can be explained by its: labor abundance. mild climate. advanced technology. increasing returns.

Labor abundance.

The MOST likely effects of tariffs and/or import quotas are to _____ prices and to _____ consumption of the protected goods in the importing country. raise; raise raise; lower lower; raise lower; lower

Raise ; lower

Taken collectively, people in nations that engage in international trade are NOT likely to: consume more than they were able to consume in the absence of trade. raise their standards of living. gain from lower opportunity costs of production. be made worse off.

be made worse off

Since the United States imports a large quantity of textiles from Asia, the overall wages of U.S. textile workers have _____, while the price of textiles in the United States has _____. decreased; decreased increased; decreased decreased; increased increased; not changed

decreased; decreased

Assume an economy moves from autarky to free international trade. In the export sector, consumer surplus _____, producer surplus _____, and the economy as a whole _____ rises; rises; gains rises; falls; gains falls; rises; gains falls; rises; loses

falls; rises; gains

Chile has a comparative advantage over the United States in copper. Which factor is a source of this comparative advantage? mild temperatures large deposits of copper ore no opportunity cost associated with copper production high tariffs on copper from other nations

large deposits of copper ore

Lower wages in China reflect _____ labor productivity in China than in the United States. This means that if the United States moved high-tech industries to China, the overall cost of production would be _____ in China than in the United States. lower; higher lower; lower higher; higher higher; lower

lower; higher

Both the United States and Canada produce automobiles and their components; however, each particular model or component is produced in only one of the two countries. Which factor explains this pattern of production and trade? differences in climate differences in factor endowments differences in technology the role of increasing returns

the role of increasing returns.

Mexico produces lettuce but can also import it. If Mexico imports some lettuce: Mexico has a comparative advantage in lettuce production. the world price is lower than the domestic price. the price in Mexico will rise to equal the world price. the domestic quantity supplied will increase.

the world price is lower than the domestic price.