Question 1

Suppose the production of 12 tons of copper in the United States requires the same amount of resources as the production of 3 tons of aluminum.In Mexico,12 tons of copper requires the same amount of resources as 2 tons of aluminum.Implicitly

Accepted Answer

Based on the given information, Mexico has a lower opportunity cost of producing copper compared to the United States as it only requires 2 tons of aluminum compared to the United States which requires 3 tons of aluminum to produce the same amount of copper. This implies that Mexico has a comparative advantage in producing copper. The information provided does not indicate anything about the absolute advantage of either country in producing aluminum or copper.

Question 2

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 goods with the same resources, indicating an absolute advantage in both beef and cars.

Question 3

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 of both jackets and shirts with the same resources, indicating an absolute advantage in both products.

Question 4

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

Accepted Answer

The country with fewer inputs has an absolute advantage in producing the good since it can produce the same amount of the good with less resources. Comparative advantage, on the other hand, refers to a country's ability to produce a good at a lower opportunity cost than another country. The statement doesn't provide information on opportunity cost, hence we can't choose option B. Option C is also incorrect because specialization doesn't always lead to an increase in worldwide consumption possibilities. It depends on whether there are gains from trade and if trade barriers exist.

Question 5

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

Comparative advantage refers to the ability to produce a good at a lower opportunity cost than another country. In this case, China has an opportunity cost of 1.5 (300/200) DVD players for every telephone produced, while Japan has an opportunity cost of 0.5 (100/200) DVD players for every telephone produced. Therefore, Japan has a comparative advantage in producing telephones. However, it does not necessarily have an absolute advantage since it can only produce 200 telephones while China can produce 300.

Question 6

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 can produce more DVD players than Japan (400 vs. 200), so it has an absolute advantage in DVD players. It can also produce more DVD players per unit of input than telephones (400/600 > 400/400), so it has a comparative advantage in DVD players.

Question 7

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

Accepted Answer

The answer of 
- Which of the following statements is...

Question 8

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

The answer of Suppose China can produce 200 TVs or...

Question 9

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 10

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

Accepted Answer

The opportunity cost of producing one motorcycle in Japan is 1/2 of a DVD player, meaning Japan gives up producing 1/2 of a DVD player for each motorcycle produced.

Question 11

- 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 12

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 13

- 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 14

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 whether a country has an absolute advantage, we must compare the total output of goods and services produced by each country in question. In this case, Russia can produce 600 pianos or 400 HDTVs, while Italy can produce 300 pianos or 150 HDTVs.

Russia has an absolute advantage in pianos (600 > 300), while Italy has an absolute advantage in HDTVs (150 > 400). Therefore, Russia does not have an absolute advantage in HDTVs.

To determine whether a country has a comparative advantage, we must compare the opportunity cost of producing one good versus another. For Russia, the opportunity cost of producing one piano is 2/3 of an HDTV (400/600), while the opportunity cost of producing one HDTV is 1.5 pianos (600/400).

For Italy, the opportunity cost of producing one piano is 1/2 of an HDTV (150/300), while the opportunity cost of producing one HDTV is 2 pianos (300/150).

Based on opportunity cost, we can see that Russia has a comparative advantage in producing HDTVs (its opportunity cost of producing HDTVs is lower), while Italy has a comparative advantage in producing pianos. Hence, the answer is B.

Question 15

-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 16

- 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 17

- 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

The answer of 
- If the two countries are at...

Question 18

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

Accepted Answer

The answer of 
- Which of the following best describes...

Question 19

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

Accepted Answer

Comparative advantage refers to the ability to produce a good or service at a lower opportunity cost than another country. Even though the United States has an absolute advantage in producing T-shirts (meaning it can produce the good more efficiently than another country), it may not have a comparative advantage if another country, such as China, can produce T-shirts at a lower opportunity cost (meaning they can produce T-shirts while giving up fewer resources compared to the United States). Therefore, option C is the correct choice. Option A is incorrect because it focuses on absolute advantage, not comparative advantage. Option B is also incorrect because it suggests that the United States has a comparative advantage because it uses fewer resources to produce T-shirts, but this is not necessarily true as another country could still have a lower opportunity cost in producing T-shirts.

Question 20

- 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...

Quiz 35: International Trade

Suppose the production of 12 tons of copper in the United States requires the same amount of resources as the production of 3 tons of aluminum.In Mexico,12 tons of copper requires the same amount of resources as 2 tons of aluminum.Implicitly

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

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

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

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

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

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

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

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

- 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?

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

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

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

-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 DVD players in Japan?

- 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?

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

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

- 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