Question 1

Small countries tend to have higher measures of openness than larger countries because

Accepted Answer

Small countries have limited domestic markets, so they are more reliant on international trade to achieve economic growth. This reliance on international trade leads them to have higher levels of openness compared to larger countries.

Question 2

Most of the world's population now lives in countries that are

Accepted Answer

The production possibilities frontier (PPF) suggests that countries that have integrated or are integrating into world markets have a larger set of options for producing goods and services compared to countries that are economically independent or attempting to overcome economic isolation. As most of the world's population lives in countries that are becoming integrated into world markets, choice A is the best answer.

Question 3

Which term describes the ability of a firm/industry, under free and fair market conditions, to design, produce, and market goods and services that are better and/or cheaper than those of other firms/industries?

Accepted Answer

Competitiveness refers to the ability of a firm/industry to produce goods and services more efficiently and effectively than its competitors. It involves designing, producing, and marketing goods and services in a way that is better and/or cheaper than those of other firms/industries, which ultimately leads to greater market share and profitability. Protectionism, on the other hand, refers to the use of barriers such as tariffs and quotas to protect domestic industries from foreign competition. Comparative advantage and absolute advantage are concepts related to international trade and refer to the ability of one country to produce a certain good at a lower opportunity cost than another country or the ability of one country to produce more of a certain good with the same amount of resources as another country.

Question 4

What led to the sharp loss of market share in the example of the Eastman Kodak Company?

Accepted Answer

The sharp loss of market share in the example of the Eastman Kodak Company was due to the company's lack of innovation in emerging digital technologies.

Question 5

North Carolina produces sweet potatoes in its rich soil, but does not have the climate to grow oranges well.It is correct to say that North Carolina has a _________sweet potato production relative to Florida.

Accepted Answer

North Carolina has a comparative advantage in sweet potato production, meaning it can produce sweet potatoes at a lower opportunity cost than Florida. This does not necessarily imply a free trade agreement or a trade imbalance, and there is no indication of a monopoly.

Question 6

Economic interdependence occurs through

Accepted Answer

Economic interdependence occurs through trade, which allows countries to specialize in producing certain goods and services and then exchange them with other countries for goods and services that they do not produce as efficiently. Protectionism, war, and tariffs all limit trade and can lead to economic isolationism rather than interdependence.

Question 7

A sudden shift from import tariffs to free trade may induce short-term unemployment in

Accepted Answer

A sudden shift from import tariffs to free trade may induce short-term unemployment in import-competing industries because they may not be able to compete with foreign producers who may have a cost advantage. This competition may lead to lower prices for consumers but may harm the domestic industry and lead to job losses. The other options (B, C, D) do not necessarily apply in the context of this scenario.

Question 8

International trade generally

Accepted Answer

International trade generates income for countries through exports and imports, leading to economic growth and higher standards of living.

Question 9

Specialization is an advantage of

Accepted Answer

Specialization typically occurs in large-scale production because it allows workers to focus on specific tasks, leading to higher efficiency and productivity. Monopolies may also have some advantages in terms of specialization, but it is not necessarily inherent to monopolies. Smaller production runs would not typically lead to specialization since workers would need to perform multiple tasks. High wages for foreign workers is not directly related to specialization.

Question 10

Which statement about globalization is true?

Accepted Answer

Globalization refers to the interconnectedness and integration of economies, societies, and cultures around the world. This interconnectedness has been fueled by trade, immigration, and foreign investment, allowing countries to specialize in certain areas and benefit from the gains of trade. Therefore, option C is the correct statement. Option A is incorrect because globalization has led to a reduction in quotas and trade barriers. Option B is incorrect because globalization also includes cultural and societal integration, not just economic integration. Option D is incorrect because globalization promotes interdependence, not economic self-sufficiency.

Question 11

With globalization and import competition, U.S.prices generally

Accepted Answer

With globalization and import competition, U.S. prices generally decrease due to increased competition and access to cheaper imports. This drives down the cost of goods and services for consumers.

Question 12

The largest amount of trade with the United States in recent years has been conducted with

Accepted Answer

The answer of The largest amount of trade with the...

Question 13

Which statement is true about import restrictions?

Accepted Answer

The answer of Which statement is true about import restrictions?
...

Question 14

A closed economy is one in which

Accepted Answer

A closed economy is one that does not participate in international trade or only participates to a limited extent. Therefore, the economy is isolated from foreign trade which is consistent with option C. Option A refers to a balanced trade model, option B refers to foreign investment, and option D relates to technology and transportation improvements rather than the concept of a closed economy.

Question 15

Which statement is true about international trade?

Accepted Answer

International trade involves both imports and exports, and they are interconnected. When a country experiences an increase in imports, it may lead to a decrease in the demand for domestic goods and may result in unemployment. However, if a country increases its exports, it can lead to increased production and potentially more jobs. Therefore, imports and exports are connected, and as one falls, the other generally rises.

Question 16

According to human rights activists, which organization supports governments that permit sweatshops?

Accepted Answer

The answer of According to human rights activists, which organization...

Question 17

The definition of an open economy is that it

Accepted Answer

An open economy conducts trade with other countries, which means that it is involved in international exchange of goods, services, and capital. Private ownership of capital is not a defining characteristic of an open economy, and the exchange rate regime (flexible or fixed) is not necessarily relevant to its classification as an open economy.

Question 18

The United States was less open to international trade between

Accepted Answer

The answer of The United States was less open to...

Question 19

Following World War II, the U.S.

Accepted Answer

Following World War II, the U.S. focused on technological advancements in industry, which allowed for increased productivity and economic growth. While there were some increases in trade barriers and protectionist policies, overall the U.S. remained relatively open in terms of international trade and investment. There was not a significant period of economic isolationism following the war.

Question 20

A primary reason why nations conduct international trade is because

Accepted Answer

The production possibilities frontier (PPF) illustrates the trade-offs faced by an economy that produces only two goods. It shows the maximum quantity of one good that can be produced for each possible quantity of the other good produced. The slope of the PPF reflects the opportunity cost of producing one good in terms of the other. When the opportunity cost of producing a good is lower in another country, it becomes more efficient for the two countries to trade with each other. Nations conduct international trade because certain goods and services can be obtained more cheaply or efficiently in other countries. Choice D correctly explains this concept.

Quiz 1: The International Economy and Globalization