Question 1

The top four trading partners of the United States include Canada, Mexico, China, and:&#10;A) Japan.&#10;B) Ireland.&#10;C) Brazil.&#10;D) Ukraine.

Accepted Answer

Japan is one of the top trading partners of the United States, along with Canada, Mexico, and China. This is due to the significant volume of imports and exports between the two countries, encompassing a wide range of goods and services.

Question 2

The United States exports more to:&#10;A) Japan than to Mexico.&#10;B) Germany than to the United Kingdom.&#10;C) Canada than to China.&#10;D) Mexico than to Canada.

Accepted Answer

C) Canada than to China. The United States exports more goods and services to Canada than to any other country, making Canada the largest export market for the U.S. This is due to the close geographical proximity, shared language and culture in many aspects, and agreements such as the United States-Mexico-Canada Agreement (USMCA), which facilitates trade between these countries.

Question 3

The United States imports more from&#10;A) Japan than from Mexico.&#10;B) South Korea than from Germany.&#10;C) Canada than from China.&#10;D) China than from Japan.

Accepted Answer

The United States imports more from China than from Japan, as China is one of the largest trading partners of the U.S.

Question 4

_____ advantage is the ability to produce a product at a lower opportunity cost than a trading partner can.&#10;A) Comparative&#10;B) Absolute&#10;C) Equal&#10;D) Production

Accepted Answer

Comparative advantage refers to the ability of an entity to produce a good or service at a lower opportunity cost than its trade partners. This concept is key in international trade theory, suggesting that even if one country is less efficient in producing all goods compared to another country, there can still be benefits from trade if they specialize according to their comparative advantages.

Question 5

In constructing a production possibilities frontier model, only _____ considered.&#10;A) one good is&#10;B) two goods are&#10;C) three goods are&#10;D) four goods are

Accepted Answer

In a production possibilities frontier (PPF) model, typically two goods are considered. This simplification allows for the graphical representation of trade-offs in production between the two goods on a two-dimensional graph.

Question 6

Consider a production possibilities frontier model for Mexico and Canada where each country makes only two goods - cars and shoes. If Mexico puts all of its resources into making shoes, it would be able to make:

A) zero cars.
B) one car.
C) two cars.
D) three cars.

Accepted Answer

If Mexico allocates all of its resources to making shoes, it means no resources are left for making cars, resulting in zero cars being produced.

Question 7

Every production decision involves _____ cost.&#10;A) a temporary&#10;B) a permanent&#10;C) an opportunity&#10;D) a sunk

Accepted Answer

Opportunity cost is the cost of the next best alternative foregone when making a production decision, reflecting the trade-offs of choosing one option over another.

Question 8

If one country can produce a product at a lower opportunity cost relative to another country, it has ____ advantage over the other country.&#10;A) a comparative&#10;B) an absolute&#10;C) an equal&#10;D) a production

Accepted Answer

Comparative advantage occurs when a country can produce a good at a lower opportunity cost than another country. This concept is key in international trade, allowing countries to benefit from specializing in goods where they have a comparative advantage and trading for others. Absolute advantage, on the other hand, refers to the ability of a country to produce more of a good using the same amount of resources as another country, which is not the focus of this question.

Question 9

Comparative advantage is measured in terms of _____ cost.&#10;A) production&#10;B) absolute&#10;C) equal&#10;D) relative

Accepted Answer

Comparative advantage is measured in terms of relative cost, which refers to the ability of a country to produce a good at a lower opportunity cost compared to other countries.

Question 10

(Figure: Production Possibilities Frontier) In the figure, if Mexico specializes, it can produce either _____ shoes or _____ cars.&#10;  &#10;A) four; three&#10;B) three; four&#10;C) two; four&#10;D) four; two

Accepted Answer

The answer of (Figure: Production Possibilities Frontier) In the figure,...

Question 11

(Figure: Production Possibilities Frontier 2) In the figure, if Canada specializes it can produce either _____ shoes or _____ cars.&#10;  &#10;A) four; three&#10;B) three four&#10;C) two; four&#10;D) four; two

Accepted Answer

The answer of (Figure: Production Possibilities Frontier 2) In the...

Question 12

(Figure: Production Possibilities Frontier) In the figure, without trade Mexico can produce _____ shoes and _____ cars.&#10;  &#10;A) three; three&#10;B) two; one&#10;C) one; three&#10;D) zero; four

Accepted Answer

The answer of (Figure: Production Possibilities Frontier) In the figure,...

Question 13

(Figure: Production Possibilities Frontier) In the figure, for each pair of shoes that Mexico produces, the opportunity cost is:&#10;  &#10;A) half a car.&#10;B) one car.&#10;C) one and a half cars.&#10;D) two cars.

Accepted Answer

The answer of (Figure: Production Possibilities Frontier) In the figure,...

Question 14

(Figure: PPF) In the figure, _____ a comparative advantage in making shoes.&#10;  &#10;A) Canada has&#10;B) Mexico has&#10;C) neither country has&#10;D) both countries have

Accepted Answer

The answer of (Figure: PPF) In the figure, _____ a...

Question 15

(Figure: PPF) In the figure, _____ a comparative advantage in making cars.&#10;  &#10;A) Canada has&#10;B) Mexico has&#10;C) neither country has&#10;D) both countries have

Accepted Answer

The answer of (Figure: PPF) In the figure, _____ a...

Question 16

(Figure: PPF) In the figure, _____ should export shoes.&#10;  &#10;A) Canada&#10;B) Mexico&#10;C) neither country&#10;D) both countries

Accepted Answer

The answer of (Figure: PPF) In the figure, _____ should...

Question 17

(Figure: PPF) In the figure, _____ should export cars.&#10;  &#10;A) Canada&#10;B) Mexico&#10;C) neither country&#10;D) both countries

Accepted Answer

The answer of (Figure: PPF) In the figure, _____ should...

Question 18

(Figure: PPF) In the figure, with specialization and terms of trade of 3 shoes for 2 cars, Mexico can consume _____ shoe(s) and _____ car(s).&#10;  &#10;A) 1; 2&#10;B) 2; 2&#10;C) 3; 1&#10;D) 4; 1

Accepted Answer

The answer of (Figure: PPF) In the figure, with specialization...

Question 19

(Figure: PPF) In the figure, with specialization and terms of trade of 3 shoes for 2 cars, Canada can consume _____ shoe(s) and _____ car(s).&#10;  &#10;A) 1; 2&#10;B) 2; 2&#10;C) 3; 1&#10;D) 4; 1

Accepted Answer

The answer of (Figure: PPF) In the figure, with specialization...

Question 20

(Figure: PPF0) In the figure, _____ a comparative advantage in making pizza.&#10;  &#10;A) Luxembourg has&#10;B) Liechtenstein has&#10;C) neither country has&#10;D) both countries have

Accepted Answer

The answer of (Figure: PPF0) In the figure, _____ a...

Question 21

(Figure: PPF0) In the figure, _____ a comparative advantage in making calzones.&#10;  &#10;A) Luxembourg has&#10;B) Liechtenstein has&#10;C) neither country has&#10;D) both countries have

Accepted Answer

The answer of (Figure: PPF0) In the figure, _____ a...

Question 22

(Figure: PPF0) In the figure, _____ should export calzones.&#10;  &#10;A) Luxembourg&#10;B) Liechtenstein&#10;C) neither country&#10;D) both countries

Accepted Answer

The answer of (Figure: PPF0) In the figure, _____ should...

Question 23

(Figure: PPF0) In the figure, _____ should export pizzas.&#10;  &#10;A) Luxembourg&#10;B) Liechtenstein&#10;C) neither country&#10;D) both countries

Accepted Answer

The answer of (Figure: PPF0) In the figure, _____ should...

Question 24

(Figure: PPF0) In the figure, with specialization and terms of trade of 2 pizza for 2 calzone, Luxembourg can consume _____ pizza(s) and _____ calzone(s).&#10;  &#10;A) 2; 3&#10;B) 2; 4&#10;C) 4; 3&#10;D) 4; 6

Accepted Answer

The answer of (Figure: PPF0) In the figure, with specialization...

Question 25

(Figure: PPF0) In the figure, with specialization and terms of trade of 3 pizza for 3 calzone, Liechtenstein can consume _____ pizza(s) and _____ calzone(s).&#10;  &#10;A) 1; 6&#10;B) 2; 3&#10;C) 3; 3&#10;D) 6; 3

Accepted Answer

The answer of (Figure: PPF0) In the figure, with specialization...

Question 26

The opportunity cost of a good on the x-axis of a production possibilities frontier is the _____ of the production possibility frontier.&#10;A) x-intercept&#10;B) y-intercept&#10;C) slope&#10;D) inverse of the slope

Accepted Answer

The answer of The opportunity cost of a good on...

Question 27

The opportunity cost of a good on the y-axis of a production possibilities frontier is the _____ of the production possibility frontier.&#10;A) x-intercept&#10;B) y-intercept&#10;C) slope&#10;D) inverse of the slope

Accepted Answer

The answer of The opportunity cost of a good on...

Question 28

_____ allows countries to consume beyond their production possibilities frontier.&#10;A) Absolute advantage&#10;B) A fixed level of resources&#10;C) Free trade&#10;D) Marketing

Accepted Answer

The answer of _____ allows countries to consume beyond their...

Question 29

_____ is the amount of one country's good that is exchanged for a different good from another country.&#10;A) The terms of trade&#10;B) The exchange rate&#10;C) Free trade&#10;D) Money

Accepted Answer

The answer of _____ is the amount of one country's...

Question 30

_____ advantage is the ability to produce more of a product than a trading partner with an equivalent amount of resources.&#10;A) Comparative&#10;B) Absolute&#10;C) Equal&#10;D) Production

Accepted Answer

The answer of _____ advantage is the ability to produce...

Question 31

Absolute advantage is the ability to produce:&#10;A) a product at a lower opportunity cost than a trading partner can.&#10;B) more of a product than a trading partner with an equivalent amount of resources.&#10;C) an equal amount of a product as a trading partner with an equivalent amount of resources can produce.&#10;D) none of a product that a trading partner with an equivalent amount of resources can produce.

Accepted Answer

The answer of Absolute advantage is the ability to produce:&#10;A)...

Question 32

Comparative advantage is the ability to produce:&#10;A) a product at a lower opportunity cost than a trading partner can.&#10;B) more of a product than a trading partner with an equivalent amount of resources.&#10;C) an equal amount of a product as a trading partner can produce with an equivalent amount of resources.&#10;D) none of a product that a trading partner with an equivalent amount of resources can produce.

Accepted Answer

The answer of Comparative advantage is the ability to produce:&#10;A)...

Question 33

______ advantage is the basis for specialization and trade.&#10;A) Comparative&#10;B) Absolute&#10;C) Equal&#10;D) Production

Accepted Answer

The answer of ______ advantage is the basis for specialization...

Question 34

When two countries trade, total output increases when each country specializes in something in which it has its respective _____ advantage.&#10;A) comparative&#10;B) absolute&#10;C) equal&#10;D) production

Accepted Answer

The answer of When two countries trade, total output increases...

Question 35

If both Mexico and Canada produce shoes and cars but Mexico has a comparative advantage in shoes and Canada has a comparative advantage in cars, then Mexico should trade _____, and Canada should trade:

A) shoes; shoes.
B) cars; cars.
C) shoes; cars.
D) cars; shoes.

Accepted Answer

The answer of If both Mexico and Canada produce shoes...

Question 36

A _____ game is where the gains or losses of one player are exactly offset by the gains or losses of another player.&#10;A) zero sum&#10;B) non-zero-sum&#10;C) win-win&#10;D) lose-lose

Accepted Answer

The answer of A _____ game is where the gains...

Question 37

Trade between two countries is generally a _____ situation.&#10;A) zero-sum&#10;B) non-zero-sum&#10;C) win-win&#10;D) lose-lose

Accepted Answer

The answer of Trade between two countries is generally a...

Question 38

In the United States, one source of competitive advantage is _____ because it has relatively more college graduates than many other countries.&#10;A) natural resources&#10;B) technological know-how&#10;C) abundant labor&#10;D) business environment

Accepted Answer

The answer of In the United States, one source of...

Question 39

In Saudi Arabia, one source of competitive advantage is _____ because it has plentiful supplies of crude oil reserves.&#10;A) natural resources&#10;B) technological know-how&#10;C) abundant labor&#10;D) business environment

Accepted Answer

The answer of In Saudi Arabia, one source of competitive...

Question 40

In India, one source of competitive advantage is _____ because it has the second highest population in the world.&#10;A) natural resources&#10;B) technological know-how&#10;C) abundant labor&#10;D) business environment

Accepted Answer

The answer of In India, one source of competitive advantage...

Question 41

In Luxembourg, one source of competitive advantage is _____ because it has very favorable tax laws.&#10;A) natural resources&#10;B) technological know-how&#10;C) abundant labor&#10;D) business environment

Accepted Answer

The answer of In Luxembourg, one source of competitive advantage...

Question 42

_____ a source of competitive advantage as illustrated by two countries, France and the United States, which assemble most of the world's large passenger airplanes.&#10;A) Physical capital is&#10;B) Technological know-how is&#10;C) Economies of scale are&#10;D) Business environments are

Accepted Answer

The answer of _____ a source of competitive advantage as...

Question 43

_____ surplus is the buyer's gain from a purchase.&#10;A) Consumer&#10;B) Producer&#10;C) Total&#10;D) Business

Accepted Answer

The answer of _____ surplus is the buyer's gain from...

Question 44

_____ surplus is the seller's gain from a sale.&#10;A) Consumer&#10;B) Producer&#10;C) Total&#10;D) Business

Accepted Answer

The answer of _____ surplus is the seller's gain from...

Question 45

On a graph, _____ surplus is measured as the space between the demand curve and equilibrium price line.&#10;A) consumer&#10;B) producer&#10;C) total&#10;D) business

Accepted Answer

The answer of On a graph, _____ surplus is measured...

Question 46

On a graph, _____ surplus is measured as the space between the supply curve and equilibrium price line.&#10;A) consumer&#10;B) producer&#10;C) total&#10;D) business

Accepted Answer

The answer of On a graph, _____ surplus is measured...

Question 47

The _____ price of a good is its prevailing price in international markets.&#10;A) U.S. consumer&#10;B) producer&#10;C) domestic&#10;D) world

Accepted Answer

The answer of The _____ price of a good is...

Question 48

The _____ price of a good is its home country price.&#10;A) U.S. consumer&#10;B) producer&#10;C) domestic&#10;D) world

Accepted Answer

The answer of The _____ price of a good is...

Question 49

The _____ price occurs under self-sufficiency and where domestic supply equals domestic demand.&#10;A) U.S. consumer&#10;B) producer&#10;C) home country&#10;D) world

Accepted Answer

The answer of The _____ price occurs under self-sufficiency and...

Question 50

The _____ price is determined by global demand for and global supply of the product.&#10;A) U.S. consumer&#10;B) producer&#10;C) home country&#10;D) world

Accepted Answer

The answer of The _____ price is determined by global...

Question 51

When the world price of a product is higher than the domestic price, with international trade domestic consumers will pay a _____ domestic price, and domestic producers will generally _____ the product.&#10;A) higher; export&#10;B) lower; export&#10;C) higher; import&#10;D) lower; import

Accepted Answer

The answer of When the world price of a product...

Question 52

With international trade, a higher world price will ultimately _____ quantity demanded in the domestic country and _____ quantity exported.&#10;A) lower; increase&#10;B) lower; decrease&#10;C) raise; increase&#10;D) raise; decrease

Accepted Answer

The answer of With international trade, a higher world price...

Question 53

Society as a whole benefits from _____ products when the domestic price is _____ the world price.&#10;A) importing; equal to&#10;B) importing; higher than&#10;C) exporting; higher than&#10;D) exporting; equal to

Accepted Answer

The answer of Society as a whole benefits from _____...

Question 54

Gains from trade can occur when a society _____ products when the domestic price is _____ the world price.&#10;A) imports; higher than&#10;B) imports; equal to&#10;C) exports; higher than&#10;D) exports; equal to

Accepted Answer

The answer of Gains from trade can occur when a...

Question 55

When the world price is lower than the domestic price, domestic producers are:&#10;A) satisfied.&#10;B) harmed.&#10;C) unaffected.&#10;D) very happy.

Accepted Answer

The answer of When the world price is lower than...

Question 56

Complete specialization by countries does not occur because:&#10;A) countries want to protect domestic producers.&#10;B) international markets cannot support specialization.&#10;C) governments of some countries do not support international trade.&#10;D) some goods, such as services, cannot be cost-effectively traded globally.

Accepted Answer

The answer of Complete specialization by countries does not occur...

Question 57

_____ are goods that cannot be cost-effectively traded globally, which thus prevents complete specialization by a country.&#10;A) Automobiles&#10;B) Agriculture products&#10;C) Haircuts&#10;D) Oil products

Accepted Answer

The answer of _____ are goods that cannot be cost-effectively...

Question 58

Italy's production of exotic sports cars is an example of the _____ reason that complete specialization by countries does not occur.&#10;A) lack of cost-effectiveness in trading some goods such as services&#10;B) variation in technical skills from country to country&#10;C) variation in consumer preferences&#10;D) transportation costs

Accepted Answer

The answer of Italy's production of exotic sports cars is...

Question 59

The inability of a haircut to be easily traded is an example of the _____ reason that complete specialization by countries does not occur.&#10;A) lack of cost-effectiveness in trading some goods such as services&#10;B) variation in technical skills from country to country&#10;C) variation in consumer preferences&#10;D) transportation costs

Accepted Answer

The answer of The inability of a haircut to be...

Question 60

Some people prefer to buy products made domestically, and others prefer the attributes of products that are made elsewhere. This is an example of the _____ reason that complete specialization by countries does not occur.&#10;A) lack of cost-effectiveness in trading some goods such as services&#10;B) variation in technical skills from country to country&#10;C) variation in consumer preferences&#10;D) transportation costs

Accepted Answer

The answer of Some people prefer to buy products made...

Question 61

In a situation where it costs the same to produce a boat domestically as it does to produce it in another country, the boat will generally be produced locally due to _____, a reason that complete specialization by countries does not occur.&#10;A) a lack of cost-effectiveness in trading some goods such as services&#10;B) a variation in technical skills from country to country&#10;C) difference in absolute advantage&#10;D) transportation costs

Accepted Answer

The answer of In a situation where it costs the...

Question 62

A restaurant meal is a good that generally is not traded globally due to _____, a reason that complete specialization by countries does not occur.&#10;A) a lack of cost-effectiveness in trading some goods such as services&#10;B) a variation in technical skills from country to country&#10;C) difference in absolute advantage&#10;D) transportation costs

Accepted Answer

The answer of A restaurant meal is a good that...

Question 63

Complete specialization by countries does not occur because:&#10;A) countries want to protect domestic producers.&#10;B) services can be cost-effectively traded globally.&#10;C) governments often do not support international trade.&#10;D) technical skills vary greatly from country to country.

Accepted Answer

The answer of Complete specialization by countries does not occur...

Question 64

Complete specialization by countries does not occur because:&#10;A) countries want to protect domestic producers.&#10;B) services can be cost-effectively traded globally.&#10;C) consumer preferences vary.&#10;D) technical skills are similar from country to country.

Accepted Answer

The answer of Complete specialization by countries does not occur...

Deck 31: International Trade