Question 1

Suppose Russia can produce either 600 pianos or 400 HDTVs,and Italy can produce either 300 pianos or 150 HDTVs.Implicitly,Russia has

Accepted Answer

To determine comparative advantage, we need to look at the opportunity cost of producing each good. 
For Russia, the opportunity cost of producing 1 piano is 2/3 HDTVs (600 pianos / 400 HDTVs = 3/2 or 1.5; reciprocal is 2/3). 
For Italy, the opportunity cost of producing 1 piano is 1/2 HDTVs (300 pianos / 150 HDTVs = 2/1 or 2; reciprocal is 1/2). 
Since Russia has a lower opportunity cost of producing HDTVs, it has a comparative advantage in HDTVs. 
However, we cannot determine absolute advantage based on this information alone, as we do not know the total production capacity of each country.

Question 2

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

Accepted Answer

Japan has a comparative advantage in telephones because it has a lower opportunity cost of producing them (1/2 DVD player) compared to China (3/4 DVD player). However, we cannot determine which country has an absolute advantage based on the information given.

Question 3

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

Accepted Answer

China can produce 200 TVs or 200 DVD players, while South Korea can produce only 100 TVs or 200 DVD players. Therefore, China has an absolute advantage in neither product. However, China has a comparative advantage in TV production because it can produce both products at an equal rate, while South Korea can only produce half as many TVs.

Question 4

Which of the following statements is true for the two countries illustrated in Figure 35.1?

Accepted Answer

The United States has a lower opportunity cost of producing DVD players compared to Japan, and therefore has a comparative advantage in producing them. There is no information provided about absolute advantage or comparative advantage in motorcycles.

Question 5

Assume South Korea and Vietnam have the same amount of resources.In a given time period,South Korea can produce 100,000 jackets or 1,000,000 shirts.Vietnam can produce 200,000 jackets or 2,000,000 shirts.This means that

Accepted Answer

Vietnam can produce more jackets and more shirts than South Korea with the same amount of resources, indicating Vietnam has an absolute advantage in both products.

Question 6

Which of the following terms of trade would enable the two countries illustrated in Figure 35.1 to trade with each other and increase consumption possibilities?

Accepted Answer

The answer of  Which of the following terms of...

Question 7

In Figure 35.1,what is the opportunity cost of motorcycles in Japan?

Accepted Answer

The answer of  In Figure 35.1,what is the opportunity...

Question 8

Which of the following best describes the comparative advantage of the two countries illustrated in Figure 35.1?

Accepted Answer

According to the figure, Japan has a lower opportunity cost for producing motorcycles while the United States has a lower opportunity cost for producing DVD players. Therefore, Japan has a comparative advantage in motorcycles and the United States has a comparative advantage in DVD players.

Question 9

When one country can produce a given amount of a good using fewer inputs than any other country,

Accepted Answer

The country has an absolute advantage in producing the good because it can produce the same amount using fewer resources. Comparative advantage, on the other hand, depends on the opportunity cost of producing one good over another in terms of alternative goods that could be produced. The given information does not provide enough information to determine comparative advantage. Specialization may increase consumption and production possibilities, but it cannot be definitively stated based on the given information.

Question 10

The production possibilities curves illustrated in Figure 35.2 reveal that

Accepted Answer

The answer of  The production possibilities curves illustrated in...

Question 11

In Figure 35.1,what is the opportunity cost of DVD players in Japan?

Accepted Answer

The answer of  In Figure 35.1,what is the opportunity...

Question 12

Assume the United States and Australia have the same amount of resources.In a given time period,the United States can produce 2 tons of beef or 200,000 cars.Australia can produce 1 ton of beef or 100,000 cars.This means that

Accepted Answer

The United States can produce more of both beef and cars than Australia with the same amount of resources, indicating an absolute advantage in both goods.

Question 13

If the two countries are at points A and B in Figure 35.1 and do not trade,what is the total number of motorcycles produced per year?

Accepted Answer

If the two countries do not trade, Country A produces 1,500 motorcycles per year and Country B produces 1,500 motorcycles per year. Therefore, the total number of motorcycles produced is 3,000 per year.

Question 14

Suppose both countries illustrated in Figure 35.1 specialized completely in the good they could produce with the lowest opportunity cost.What would the total production of motorcycles be?

Accepted Answer

The answer of  Suppose both countries illustrated in Figure...

Question 15

In Figure 35.1,what is the opportunity cost of motorcycles in the United States?

Accepted Answer

The answer of  In Figure 35.1,what is the opportunity...

Question 16

Compared to their initial positions at points A and B,as a result of complete specialization and trade,the output of the two countries added together in Figure 35.1 would result in an increase in

Accepted Answer

The answer of  Compared to their initial positions at...

Question 17

Suppose the United States can produce 2,000 cars or 2,000 trucks.Japan can produce either 2,000 cars or 1,000 trucks.In terms of car production,we can conclude that

Accepted Answer

The answer of Suppose the United States can produce 2,000...

Question 18

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

Accepted Answer

The answer of Assume the United States and Canada have...

Question 19

Suppose China can produce either 600 telephones or 400 DVD players,and Japan can produce either 400 telephones or 200 DVD players.Implicitly,China has

Accepted Answer

China has both an absolute and a comparative advantage in DVD players because it can produce more DVD players than Japan (400 vs. 200) and has a lower opportunity cost for producing DVD players compared to telephones.

Question 20

The United States has an absolute advantage in producing T-shirts,but not a comparative advantage,because

Accepted Answer

Comparative advantage is based on the opportunity cost of producing a good. If a country can produce a good at a lower opportunity cost than another country, it has a comparative advantage in producing that good. Other countries, such as China, can produce T-shirts at a lower opportunity cost relative to the United States, so the United States does not have a comparative advantage in producing T-shirts.

Quiz 35: International Trade

Suppose Russia can produce either 600 pianos or 400 HDTVs,and Italy can produce either 300 pianos or 150 HDTVs.Implicitly,Russia has

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

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

Which of the following statements is true for the two countries illustrated in Figure 35.1?

Assume South Korea and Vietnam have the same amount of resources.In a given time period,South Korea can produce 100,000 jackets or 1,000,000 shirts.Vietnam can produce 200,000 jackets or 2,000,000 shirts.This means that

Which of the following terms of trade would enable the two countries illustrated in Figure 35.1 to trade with each other and increase consumption possibilities?

In Figure 35.1,what is the opportunity cost of motorcycles in Japan?

Which of the following best describes the comparative advantage of the two countries illustrated in Figure 35.1?

When one country can produce a given amount of a good using fewer inputs than any other country,

The production possibilities curves illustrated in Figure 35.2 reveal that

In Figure 35.1,what is the opportunity cost of DVD players in Japan?

Assume the United States and Australia have the same amount of resources.In a given time period,the United States can produce 2 tons of beef or 200,000 cars.Australia can produce 1 ton of beef or 100,000 cars.This means that

If the two countries are at points A and B in Figure 35.1 and do not trade,what is the total number of motorcycles produced per year?

Suppose both countries illustrated in Figure 35.1 specialized completely in the good they could produce with the lowest opportunity cost.What would the total production of motorcycles be?

In Figure 35.1,what is the opportunity cost of motorcycles in the United States?

Compared to their initial positions at points A and B,as a result of complete specialization and trade,the output of the two countries added together in Figure 35.1 would result in an increase in

Suppose the United States can produce 2,000 cars or 2,000 trucks.Japan can produce either 2,000 cars or 1,000 trucks.In terms of car production,we can conclude that

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

Suppose China can produce either 600 telephones or 400 DVD players,and Japan can produce either 400 telephones or 200 DVD players.Implicitly,China has

The United States has an absolute advantage in producing T-shirts,but not a comparative advantage,because