1. The following table indicates the production possibilities of food and clothi

ID: 1177697 • Letter: 1

Question

1. The following table indicates the production possibilities of food and clothing per worker day in the United States and Japan. Units of Output per Worker Day

C. Mutual gains from trade could be realized if the United States specialized in food production and Japan in clothing production

D. The Japanese are high-cost producers of both food and clothing

2. Suppose there are only two goods in the world, wheat and shoes. If it is true that with its vast resources the United States could produce both more wheat and more shoes than Brazil,

A. Brazil will never have a comparative advantage and, thus, can never gain from trading with the United States

A domestic consumers gain, domestic producers lose, and the gains outweigh the losses

B. domestic producers gain, domestic consumers lose, and the gains outweigh the losses.

C. domestic consumers gain, domestic producers lose, and the losses outweigh the gains

D. domestic producers gain, but domestic consumers lose an equal amount.

Which of the following describes the relationship between interest rates and interest-sensitive goods, such as housing?

A. As interes rates decline the demand for interest sensitive good increases

b. As interest rates decline, the demand for interest sensitive goods decreases

C. As interest rates increase, the demand for interest sensitive good decreases, driving prices upwards

D. As interest rates increase, the demand for interest sensistive goods decreases, Driving prices upwards.

1. The following table indicates the production possibilities of food and clothing per worker day in the United States and Japan. Units of Output per Worker Day

Units of Output per Work Day
United States__________Japan_______________
FOOD 4 3
Clothing 12 6

Which of the following is true?
A. No gains from trade are possible
B. Joint output would be maximized if the United States specialized in producing clothing and Japan in producing Food

C. Mutual gains from trade could be realized if the United States specialized in food production and Japan in clothing production

D. The Japanese are high-cost producers of both food and clothing

2. Suppose there are only two goods in the world, wheat and shoes. If it is true that with its vast resources the United States could produce both more wheat and more shoes than Brazil,

A. Brazil will never have a comparative advantage and, thus, can never gain from trading with the United States

b. Trade between the United States and Brazil will make the USA better off but will leave Brazil worse off unless the wage of workers in Brazil rises to equal that of the American workers.
C. Total Production of wheat and shoes can not be increased through specialization and trade.
D. Both countries will be able to gain from specialization and trade as long as relative cost of producing the two goods are different in Brazil than in the United States.

3. International trade can be mutually advantageous because it

A. Encourages the adoption of sound institution and policies.
b. Reduces the competetivenes of domestic industries and, thereby makes it easier for the domestic producers to raise their prices.
C. Permits the trading partners to take advantage ofreductions in per-unit costs and in industries where economies of scale are important.
D. Does all of the above.
E. Does both A and C
4. Compared to the no-trade situation, when a country exports a good,