Question 1

A husband and wife both work during the week and decide that on Saturday morning the inside of the house must be cleaned and the yard must be mowed and weeded.If it takes the husband four hours to clean the house and three hours to do the yard work,and the wife can do either in two hours

Accepted Answer

The husband has a comparative advantage in yard work because he can complete it in three hours while the wife can complete it in two hours. This means that the opportunity cost for the husband to do yard work is lower (he would only have to sacrifice three hours of cleaning) compared to the wife (who would have to sacrifice four hours of cleaning). Therefore, it makes sense for the husband to specialize in yard work while the wife specializes in cleaning.

Question 2

This table shows the hypothetical effect of a redeployment of resources within the United States and the Arab countries for the production of oil and wheat.
 
-Which of the following can be inferred from the table?

Accepted Answer

The table shows that the Arab countries can produce 100 billion bushels of wheat at the cost of 1 billion barrels of oil, which means it costs the Arabs 1 barrel of oil for every 0.10 bushel of wheat.

Question 3

If a country is absolutely more efficient than any other country in producing everything,then it would

Accepted Answer

Even if a country is absolutely more efficient than any other country in producing everything, it would still benefit the nation to specialize and trade those goods in which it possesses a comparative advantage. This is because comparative advantage takes into account the opportunity cost of producing a particular good or service. Thus, even if a country can produce everything efficiently, it may be more productive for it to focus on producing certain goods and services and trade with other nations for the goods and services it is less efficient at producing.

Question 4

Goods and services produced in other countries and sold to U.S.residents are called

Accepted Answer

Goods and services produced in other countries and sold to U.S. residents are called imports.

Question 5

The advantage of trade,both for individuals and countries

Accepted Answer

The advantage of trade is that it allows countries and individuals to specialize in the production of goods and services in which they have a comparative advantage, leading to an increase in overall output and efficiency. This is known as the principle of comparative advantage. Therefore, option C is the correct choice. Option A, B, and E are incorrect because they are not true. Option D is incorrect because tariffs can lead to reduced trade and less advantage for both parties involved.

Question 6

Excluded from among the important bases for specialization is the existence of

Accepted Answer

Specialization is more likely to occur due to differences in resources, technology, or comparative advantage, rather than from perfect resource homogeneity and mobility, which would reduce the need for specialization.

Question 7

The following question are based on the following information. Country A can produce either 10,000 barrels of petroleum or 12,000 bushels of wheat with one unit of its resources. Country B can produce either 7,000 barrels of petroleum or 15,000 bushels of wheat with one unit of its resources.
-From this information,country

Accepted Answer

The answer of The following question are based on the...

Question 8

In general,individuals and countries that attempt to be completely self-sufficient tend to

Accepted Answer

Generally, countries and individuals that attempt to be completely self-sufficient tend to have a lower standard of living because they are limited to using only their own resources. This can make it difficult and expensive to obtain certain goods and services that may be readily available from other countries or individuals. Therefore, it is often more beneficial to specialize in certain goods and services and then trade with other countries or individuals to obtain the other goods and services needed for a higher standard of living.

Question 9

In which of the following situations describing the coffee-versus-computer production possibilities potential does country A have a comparative advantage in coffee? Country A: 1,000 bushels of coffee or 10 computers; country B:

Accepted Answer

The answer of In which of the following situations describing...

Question 10

If country A can produce either 1,000 bushels of wheat or 500 bushels of rice with 1 unit of resources while country B can produce 600 bushels of wheat or 400 bushels of rice with 1 unit of resources,country

Accepted Answer

Country B has a lower opportunity cost of producing rice compared to country A, as it only needs to give up 1.5 units of wheat to produce 1 unit of rice compared to country A giving up 2 units of wheat to produce 1 unit of rice. Therefore, country B has a comparative advantage in rice production, meaning it should specialize in producing rice and trade with country A for wheat.

Question 11

If country A can produce 200 bicycles or 500 wheelbarrows with 1 unit of resources while country B can produce 150 bicycles or 400 wheelbarrows with 1 unit of resources,then with respect to the production of bicycles,country A is ________ efficient than country B.

Accepted Answer

Country A can produce 200 bicycles with 1 unit of resources, whereas Country B can produce 150 bicycles with 1 unit of resources. To find how much more efficient Country A is in producing bicycles compared to Country B, calculate the percentage increase from 150 to 200. The increase is 50 bicycles, which is 33.33% of 150 (50/150*100). Therefore, Country A is 33 percent more efficient than Country B in producing bicycles.

Question 12

Country A must have an absolute advantage over country B in the production of a good when it

Accepted Answer

Absolute advantage means being able to produce a good with fewer resources. Therefore, country A must be able to produce a unit of the good with less resources than country B. Choices A, B, C, and D do not necessarily relate to absolute advantage.

Question 13

If country A can produce either 10 automobiles or 200 computers with 1 unit of resources while country B can produce either 8 automobiles or 125 computers with 1 unit of resources,then with respect to the production of computers,country A is ________ country B.

Accepted Answer

The answer of If country A can produce either 10...

Question 14

A country that can produce a unit of some good with less resources than another country is considered with respect to the other country to possess a(n)________ advantage.

Accepted Answer

Absolute advantage refers to the ability of a country to produce a specific good with fewer resources compared to another country. It is a comparative advantage that one country has in producing a good or service at a lower cost than another country.

Question 15

A husband and wife both work during the week and decide that on Saturday morning the inside of the house must be cleaned and the yard must be mowed and weeded.If it takes the husband four hours to clean the house and two hours to do the yard work,and the wife can do these tasks in two hours and one hour,respectively

Accepted Answer

The wife can complete both tasks in less time than the husband (3 hours vs. 6 hours), indicating she has an absolute advantage in both. However, comparative advantage involves comparing the opportunity costs, and since the wife is more efficient in both tasks, neither can have a comparative advantage over the other in this context.

Question 16

Goods and services produced in the United States and sold to other countries are called

Accepted Answer

Goods and services produced in the United States and sold to other countries are called exports.

Question 17

Exports from the United States are the goods and services

Accepted Answer

Exports are defined as goods and services produced domestically and consumed by foreigners in other countries. Therefore, option C is the correct choice. Options A and B describe imports, which are goods and services produced in other countries and consumed domestically. Option D is incorrect because exports are not subtracted from GDP but instead are included in the calculation of GDP. Option E is incorrect because goods and services produced domestically and consumed domestically by U.S. residents are not considered exports.

Question 18

Exports from the United States

Accepted Answer

The answer of Exports from the United States
...

Question 19

A country that is able to produce many goods should specialize in those products

Accepted Answer

A country should specialize in producing goods in which it has a comparative advantage, meaning it can produce them at a lower opportunity cost compared to other countries. This will lead to increased efficiency and lower costs of production, making the country more competitive in the global market. Specializing in products in which a country has an absolute advantage (i.e., can produce more efficiently than any other country) may not always be the most efficient or profitable choice. Producing goods that are in high demand on the world market or that citizens are willing to pay the most for may also not be the most feasible or efficient choice for the country's resources and capabilities. Finally, producing goods that a country needs the most may not always align with what is most economically advantageous for the country.

Question 20

The following question are based on the following information. Country A can produce either 10,000 barrels of petroleum or 12,000 bushels of wheat with one unit of its resources. Country B can produce either 7,000 barrels of petroleum or 15,000 bushels of wheat with one unit of its resources.
-If each country shifts one unit of resources into the production of the good in which it is relatively more efficient,world output would rise by

Accepted Answer

Country A is relatively more efficient in producing petroleum (10,000 barrels vs. 12,000 bushels of wheat), and Country B is more efficient in producing wheat (15,000 bushels vs. 7,000 barrels of petroleum). By shifting resources, Country A produces 10,000 barrels of petroleum instead of 12,000 bushels of wheat, and Country B produces 15,000 bushels of wheat instead of 7,000 barrels of petroleum. The net gain is 3,000 barrels of petroleum and 3,000 bushels of wheat.

Quiz 27: International Trade