MacroEconomics Chapter 19 SG Questions

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The opportunity cost of producing 1 computer in China is

1/3 of a ton of soybeans

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The opportunity cost of producing 1 ton of soybeans in the United States is

5 computers

Suppose China can produce either 300 telephones or 200 DVD players, and Japan can produce either 200 telephones or 100 DVD players. Implicitly Japan has

A comparative but not an absolute advantage in telephones

Which of the following is a gain from trade

A giver standard of living for all trading countries

A quota is

A limit on the quantity of a good that may be imported

The infant industry argument can be justified because

A new industry may be difficult to start in the face of existing foreign competition

Assume the United States and Canada have the same amount of resources. In a given time period, the United States can produce 3 tons of steel or 300 tons of wheat. Canada can produce 4 tons of steel or 400 tons of wheat. This means that

Canada has an absolute advantage in steel and wheat

Specialization in production and then trading with other countries

Change the mix of output for each country and increase total world output

Suppose China can produce 200 TVs or 200 DVD players. South Korea can produce either 100 TV's to 200 DVD players. In terms of TV production we can conclude that

China has a comparative advantage

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The output of computers and soybeans would be greatest if

China specialized in producing soybeans, and the United States specialized in making computers

If a country is completely self-reliant in producing goods for its own consumption needs, then

Consumption possibilities will increase with specialization and trade

If the United States raises tariffs on foreign goods, it may achieve

Greater profitability of import competing firms

Protectionism achieves which of the following goals?

Protection of infant industries

Producers of paper products are most likely to be in favor of

Protectionism in the paper product market but free trade in the lumber maket

International Trade

Redistributes income from import competing industries to export industries

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. From the information in Table 35.1, it is clear that

The United States has an absolute advantage in both goods

Which of the following groups has an interest in encouraging free trade

Workers in export industries

When a country has a lower opportunity cost in producing a good than any other country

consumption possibilities will increase with specialization and trade

When a country imposes tariffs, it is likely to cause

higher prices for the import competing goods

Suppose that Brazil has a comparative advantage in coffee and Mexico has a comparative advantage in tomatoes. Which of the following groups would be worse off if these countries specialize and trade

Mexican coffee producers

Which group is most likely to be adversely affected by the importation of foreign steel

Domestic steelworkers

In terms of the world as a whole, imports must equal exports because

Every good exported by one country becomes an import for another country

A country has a comparative advantage in a good if

It can produce a good at a lower opportunity cost relative to another country

If the United States has a trade deficit, this means that

The trade balance is negative

World output of goods and services increases with specialization because

The world's resources are being used more efficiently