Assignment 9

If this is an open economy, quantity supplied of cars by the domestic producers will be ________. a) 20,000 b) 40,000 c) 60,000 d) 80,000

a) 20,000

Refer to the table below. Martha's opportunity cost of making of a pie is: Time to Make a Pie Time to Make a Cake Martha 60 minutes 80 minutes Julia 50 minutes 60 minutes a) 3/4 of a cake. b) 4/3 of a cake. c) 8 cakes. d) 80 cakes.

a) 3/4 of a cake.

A tariff is a tax imposed on ______ good. a) an imported b) a luxury c) an illegal d) a domestic

a) an imported

If the price of a good in a closed economy is greater than the world price, then if the country opens its markets to world trade the country will be a ______ of that good. a) net importer b) net exporter c) importer and exporter d) producer

a) net importer

Refer to the table below. Based on their comparative advantage, Martha should specialize in _______ while Julia should specialize in _______. Time to Make a Pie Time to Make a Cake Martha 60 minutes 80 minutes Julia 50 minutes 60 minutes a) pies; cakes b) cakes; pies c) neither pies nor cakes; both pies and cakes d) both pies and cakes; neither pies nor cakes

a) pies; cakes

What is the world price of sugar without the tariff? a) $500/ ton b) $1,000/ton c) $1,500/ton d) $2,000/ton

b) $1,000/ton

The increase in the price of sugar created by the tariff will lead domestic production to increase by ____ tons per year, compared to when the economy is open without the tariff. a) 10 b) 20 c) 30 d) 40

b) 20

How many cars will this country import in an open economy situation? a) 20,000 b) 40,000 c) 60,000 d) 80,000

b) 40,000

An individual has an absolute advantage in producing pizzas if that individual: a) has a lower opportunity cost of producing pizzas than anyone else. b) can produce more pizzas in a given amount of time than anyone else. c) has a higher opportunity cost of producing pizzas than anyone else. d) charges the lowest price for pizzas.

b) can produce more pizzas in a given amount of time than anyone else.

Protectionism is the view that: a) a country's free trade agreements should be enforced. b) free trade is harmful and should be restricted. c) a country can best defend itself against foreign attack if it opens itself to trade. d) free trade agreements best protect a nation's economic interests.

b) free trade is harmful and should be restricted.

Refer to the table below. According to the table, Martha has the absolute advantage in: Time2Make a Pie Time2Make a Cake Martha 60 minutes 80 minutes Julia 50 minutes 60 minutes a) pies. b) neither pies nor cakes. c) cakes. d) both pies and cakes.

b) neither pies nor cakes.

The price at which a good or service is traded on international markets is called the ________ price. a) international b) world c) universal d) market

b) world

If this is an open economy, the price of a car will be ________ .a) $6,000/car b) $8,000/car c) $10,000/car d) $14,000/car

c) $10,000/car

Refer to the table above. ______ has the comparative advantage in making pies and ______ the comparative advantage in making cakes. Time to Make a Pie Time to Make a Cake Martha 60 minutes 80 minutes Julia 50 minutes 60 minutes a) Martha; Martha b) Julia; Julia c) Martha; Julia d) Julia; Martha

c) Martha; Julia

The benefits of specialization can be used to explain why: a) workers prefer to work on a variety of tasks during the day. b) machines are more productive than human workers. c) individuals and nations benefit from trade. d) big companies take advantage of smaller ones.

c) individuals and nations benefit from trade.

If you have a comparative advantage in a particular task, then: a) you are better at it than other people. b) you give up more to accomplish that task than do others. c) you give up less to accomplish that task than do others. d) you have specialized in that task, while others have not.

c) you give up less to accomplish that task than do others.

What is the amount of tariff imposed on a ton of sugar? a) $1 b) $50 c) $500 d) $1000

d) $1000

What is the price of cars if this were a closed economy? a) $6,000/car b) $8,000/car c) $10,000/car d) $14,000/car

d) $14,000/car

Compared to an open economy without a tariff, the amount of imported sugar will drop from _____ tons to _____ tons after the tariff is imposed. a) 20; 10 b) 40; 20 c) 60; 30 d) 80; 40

d) 80; 40

When a nation reduces the barriers to international trade: a) each individual citizen becomes better off. b) each individual citizen becomes worse off. c) the total value of all goods and services produced by the nation falls. d) the total value of all goods and serviced produced by the nation rises.

d) the total value of all goods and serviced produced by the nation rises.