Question 1

Trade enhances the economic well-being of a nation in the sense that

Accepted Answer

Trade results in an increase in total surplus. This is because trade allows for specialization and comparative advantage, which in turn lead to a greater volume of goods being produced and consumed at lower prices. This creates a net gain for both producers and consumers, leading to an increase in total economic surplus. Option A is partially correct but incomplete as it does not consider the case of the nation importing or exporting the good. Option B is incorrect as it assumes that one group gains at the expense of the other. Option D is incorrect as trade can also put upward pressure on the prices of certain goods.

Question 2

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

Accepted Answer

The answer of When a country that imported a particular...

Question 3

For any country,if the world price of zinc is higher than the domestic price of zinc without trade,that country should

Accepted Answer

The answer of For any country,if the world price of...

Question 4

When,in our analysis of the gains and losses from international trade,we assume that a country is small,we are in effect assuming that the country

Accepted Answer

When we assume a country is small in our analysis of gains and losses from international trade, we are assuming that the country cannot affect world prices by trading with other countries. This is because the country's share of the world market is too small to have a significant impact on prices. However, this does not mean that the country cannot experience gains or losses from trade, or that it cannot have a comparative advantage over other countries.

Question 5

Suppose the United States exports cars to France and imports cheese from Switzerland.This situation suggests that

Accepted Answer

This situation demonstrates that the United States has a comparative advantage in producing cars over France, as it is exporting them to France. Similarly, Switzerland has a comparative advantage in producing cheese over the United States, as it is exporting it to the United States. Therefore, choice B is the correct answer. Choices A, C, and D are incorrect as they do not accurately reflect the concept of comparative advantage.

Question 6

Assume,for Singapore,that the domestic price of soybeans without international trade is higher than the world price of soybeans.This suggests that,in the production of soybeans,

Accepted Answer

Since the domestic price of soybeans in Singapore is higher than the world price, it indicates that Singapore is not very efficient in producing soybeans compared to other countries. This means other countries have a comparative advantage over Singapore in producing soybeans and can produce them at a lower cost. Therefore, it would be more beneficial for Singapore to import soybeans from other countries with a lower price.

Question 7

In analyzing international trade,we often focus on a country whose economy is small relative to the rest of the world.We do so

Accepted Answer

By focusing on a small country, we can assume that its participation in international trade will not have a significant impact on world prices of goods. This assumption allows us to more easily analyze the gains and losses from trade. The other choices (A and C) are not necessarily true and do not fully justify the focus on a small country.

Question 8

If a country allows trade and,for a certain good,the domestic price without trade is lower than the world price,

Accepted Answer

The answer of If a country allows trade and,for a...

Question 9

When a country allows trade and becomes an importer of a good,

Accepted Answer

When a country becomes an importer of a good, domestic producers will face competition from the foreign producers, which will lead to a decrease in the domestic price of the good. This decrease in price will benefit domestic consumers, as they will be able to purchase the good at a lower price. However, domestic producers will suffer from the competition, as they will have to reduce their production or lower their price to remain competitive. Therefore, domestic producers will become worse off, and domestic consumers will become better off.

Question 10

If the world price of textiles is higher than Vietnam's domestic price of textiles without trade,then Vietnam

Accepted Answer

The answer of If the world price of textiles is...

Question 11

When a country allows trade and becomes an exporter of a good,

Accepted Answer

When a country allows trade and becomes an exporter of a good, domestic producers gain because they are able to sell more of their product at a higher price on the world market. However, domestic consumers lose because they have to pay a higher price for the product due to the increased demand for it from other countries.

Question 12

When a country allows trade and becomes an importer of a good,

Accepted Answer

When a country becomes an importer of a good, there will be winners and losers. The winners will be consumers who will benefit from having access to a greater variety of goods at lower prices. The losers will be producers who will face increased competition from foreign producers and may eventually lose their jobs or face declining profits. However, the gains of the winners are likely to exceed the losses of the losers, resulting in a net benefit to the country as a whole.

Question 13

Trade among nations is ultimately based on

Accepted Answer

Comparative advantage refers to the ability of a country or a firm to produce a particular good or service at a lower opportunity cost than its competitors, which leads to mutually beneficial trade relationships between countries. Absolute advantage, strategic advantage, and technical advantage do not fully account for the patterns and benefits of international trade.

Question 14

When,in our analysis of the gains and losses from international trade,we assume that a particular country is small,we are

Accepted Answer

The answer of When,in our analysis of the gains and...

Question 15

Assume,for the U.S. ,that the domestic price of beef without international trade is lower than the world price of beef.This suggests that,in the production of beef,

Accepted Answer

The U.S. has a comparative advantage in beef production because its domestic price is lower than the world price, indicating it can produce beef more efficiently than other countries, leading to exports.

Question 16

A country has a comparative advantage in a product if the world price is

Accepted Answer

The answer of A country has a comparative advantage in...

Question 17

Suppose Haiti has an absolute advantage over other countries in producing oranges,but other countries have a comparative advantage over Haiti in producing oranges.If trade in oranges is allowed,Haiti

Accepted Answer

Even though Haiti has an absolute advantage in producing oranges, other countries have a comparative advantage over Haiti, which means they can produce oranges at a lower opportunity cost. Therefore, it would be more beneficial for Haiti to import oranges from those countries at a lower cost than it would be for them to produce their own oranges.

Question 18

Suppose Puerto Rico has a comparative advantage over other countries in producing sugar,but other countries have an absolute advantage over Puerto Rico in producing sugar.If trade in sugar is allowed,Puerto Rico

Accepted Answer

Puerto Rico will export sugar because it has a comparative advantage, meaning it can produce sugar at a lower opportunity cost than other countries, even if those countries have an absolute advantage.

Question 19

When the nation of Worldova allows trade and becomes an exporter of silk,

Accepted Answer

When Worldova becomes an exporter of silk, it means the country has a comparative advantage in producing silk, leading to higher profits for silk producers (they become better off). However, this may increase the domestic price of silk, making silk buyers worse off. Overall, exporting silk increases the economic well-being of Worldova through gains from trade.

Question 20

In analyzing the gains and losses from international trade,to say that Moldova is a small country is to say that

Accepted Answer

Being a small country, Moldova does not have enough market power to influence the prices of goods in the world market. Therefore, Moldova is a price taker and must accept the world prices of goods when engaging in international trade.

Quiz 9: Application: International Trade

Trade enhances the economic well-being of a nation in the sense that

When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

For any country,if the world price of zinc is higher than the domestic price of zinc without trade,that country should

When,in our analysis of the gains and losses from international trade,we assume that a country is small,we are in effect assuming that the country

Suppose the United States exports cars to France and imports cheese from Switzerland.This situation suggests that

Assume,for Singapore,that the domestic price of soybeans without international trade is higher than the world price of soybeans.This suggests that,in the production of soybeans,

In analyzing international trade,we often focus on a country whose economy is small relative to the rest of the world.We do so

If a country allows trade and,for a certain good,the domestic price without trade is lower than the world price,

When a country allows trade and becomes an importer of a good,

If the world price of textiles is higher than Vietnam's domestic price of textiles without trade,then Vietnam

When a country allows trade and becomes an exporter of a good,

When a country allows trade and becomes an importer of a good,

Trade among nations is ultimately based on

When,in our analysis of the gains and losses from international trade,we assume that a particular country is small,we are

Assume,for the U.S. ,that the domestic price of beef without international trade is lower than the world price of beef.This suggests that,in the production of beef,

A country has a comparative advantage in a product if the world price is

Suppose Haiti has an absolute advantage over other countries in producing oranges,but other countries have a comparative advantage over Haiti in producing oranges.If trade in oranges is allowed,Haiti

Suppose Puerto Rico has a comparative advantage over other countries in producing sugar,but other countries have an absolute advantage over Puerto Rico in producing sugar.If trade in sugar is allowed,Puerto Rico

When the nation of Worldova allows trade and becomes an exporter of silk,

In analyzing the gains and losses from international trade,to say that Moldova is a small country is to say that