1. If a country has a comparative advantage in the production of a good: A) it c
ID: 1237126 • Letter: 1
Question
1.If a country has a comparative advantage in the production of a good:
A) it can produce that good at a lower opportunity cost.
B) it will find trade most beneficial when it trades with another country that has a comparative advantage in the same good.
C) it will not find trade beneficial because other country(ies) won't have a comparative advantage in other goods.
D) it must also have an absolute advantage in the good.
2.
Countries that engage in trade will tend to specialize in goods in which they have a(n)
_______ and will _______ those goods.
A) comparative advantage; import
B) absolute advantage; export
C) comparative advantage; export
D) economic profit; import
6. If the opportunity cost is 2X = 1Y for country A and 1/3X = 1Y for country B, then a possible terms of trade is:
A) 1X = 1Y.
B) 1X = 4Y.
C) 1X = 5Y.
D) 3X = 1Y.
7.
Opportunity cost reflected on a production possibilities curve is :
A) the cost of reducing the output of one good in order to increase the output of another.
B) the rate at which people are willing to exchange goods as determined by demand and supply.
C) the dollar cost of the good given up to get another good.
D) independent of the slope of the curve.
8.
The expression "terms of trade" refers to the:
A) rate at which a nation can trade its products for imported goods.
B) credit terms that an exporter extends to an importer.
C) period of time within which an importer can pay an exporter without incurring a finance charge.
D) terms on which an importer borrows from his bank in order to finance his purchases.
9.
The absolute value of the slope of the production possibilities curve at any point:
A) gives the price of the good on the vertical axis that must be given up to attain an additional unit of the good on the horizontal axis.
B) is found by dividing the horizontal change by a vertical change.
C) gives the quantity of the good on the vertical axis that must be given up to produce an additional unit of the good on the horizontal axis.
D) gives the price of the good on the horizontal axis relative to the price of the good on the vertical axis.
Explanation / Answer
1:-A) it can produce that good at a lower opportunity cost. 2:-C) comparative advantage; export 8:-C) period of time within which an importer can pay an exporter without incurring a finance charge. sry couldnt answer other
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