Ch. 5 - Quiz

Who is harmed when individual nations move from autarky to free​ trade?

A. The owners of the firms that went out of business.

Among the main sources of comparative advantage are the​ following:

A. climate and natural​ resources, relative abundance of labor and​ capital, technology, external economies.

Comparative advantage

A. is the ability of an​ individual, a​ firm, or a country to produce a good or service at a lower opportunity cost than competitors.

​_____ is a situation in which a country does not trade with other countries. The​ _____ is the ratio at which a country can trade its exports for imports from other countries.

B. Autarky, terms of trade

We do not see complete specialization in the real world because

B. not all goods and services are traded​ internationally, production of most goods involves increasing opportunity​ costs, and tastes for products differ.

Dumping

C. is selling a product for a price below its cost of production.

By​ trading, countries are able to consume more than they could without trade. This outcome is possible because

D. all of the above.

The World Trade Organization​ (WTO)

D. all of the above.

How is the U.S. economy affected by international​ trade? U.S. consumers buy __________ quantities of goods and services produced in other countries. At the same​ time, U.S. businesses sell ___________ quantities of goods and services to consumers in other countries.

increasing, increasing

The United States is _________________ a medium quantity exporter the smallest exporter one of the largest exporters in the world. International trade remains _____________ less important of similiar more important to the United States than it is to most other countries.

one of the largest exporters, less important