One country has a comparative advantage over another in the production of a good

Question

One country has a comparative advantage over another in the production of a good if it Has a curved production possibilities curve and the other country has a liner production Has a liner production possibilities curve and the other hand a curved production possibilities curve Is a lower opportunity cost producer of the good Has lower fixed costs than the other country The difference between the amount a seller receives for a good and the lowest amount for which he would sell the good is called Producers' surplus Windfall gain Consumers' surplus Excess profit A "tariff" is a tax on Savings Capital goods Imports Land None of the above Which of the following is not an example of a trade restriction Quotas Voluntary export restraints Dumping Tariffs None of the above In contrast to a tariff, a quota does not Reduce consumers' surplus Increase producers' surplus Generate revenues for government Raise price c and d The "balance of payments" is a periodic statement of the Assets and liabilities of a firm Money value of all transactions between producers and consumers Money value of all transactions between residents of one country and residents of another country Price of one country for example the US dollar in items of all other currencies

Explanation / Answer

21. One country has a comparative advantage...

Ans: c) Is a lower opportunity cost producer of the good.

22. The difference between the amount the seller receives.....

Ans: a) Producers surplus.

23. A tariff is a tax on...

Ans: c) Imports.

24. Which of the following is not an example of trade restriction?

Ans: c) Dumping.

25. In contrast to tariffs, quota does not

Ans: a) decrease consumers' surplus.

26. The "balance of payments" is a periodic statement of the ..

Ans: c) Money value of all transactions between residents of one country and residents of another country.

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