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If apples and pears have equivalent opportunity costs it makes no difference what the economy produces pears or apples

If apples and pears have equivalent opportunity costs,

a.it makes no difference what the economy produces, pears or apples

b.the economy always gains from producing more and trading the other

c.the production possibilities curve is bowed out

d.one apple trades for two pears

e.one apple trades for one pear

62.              International trade that is not encumbered by government restrictions is called

a.free trade

b.protectionist

c.terms of trade

d.comparative advantage trade

e.absolute advantage trade

63.              If two countries specialize,

a.the other countries trading with them cannot specialize

b.everyone in both countries gains

c.the total of goods produced increases

d.the other countries trading with them must specialize as well

e.all goods will be produced in both states

64.              International specialization allows a country to use its resources to

a.create jobs for government workers by expanding international foreign aid programs

b.produce special goods such as computer software that require specific knowledge

c.expand the development of its natural resources such as lumber, oil deposits, and
coal

d.produce specific goods, allowing other countries to focus on the production of other
goods

e.develop political ties through international cooperation and mutual sharing of goods

65.              Suppose rice can be produced in China at a lower cost than in Thailand, while tuna can be
                            produced in Thailand at a lower cost than in China. International competition will

a.destroy the rice market in both countries

b.drive China to specialize in rice and Thailand to specialize in tuna

c.drive Thailand to specialize in rice and China to specialize in tuna

d.cause both countries to reject international specialization

e.result in lower total output of rice and tuna

66.              If Iceland can produce fish with fewer resources than Greenland, we have evidence of

a.specialization

b.geographic advantage

c.comparative advantage

d.absolute advantage

e.free trade

67.              If Dana can paint his house faster than Luke, a professional house painter, then

a.Dana has a comparative advantage in house painting

b.Dana has an absolute advantage in house painting

c.Luke has a comparative advantage in house painting

d.Luke has an absolute advantage in house painting

e.Dana should always paint his own house

68.              If India has an absolute advantage in rug production compared to England, then

a.India should export rugs to England

b.England should export rugs to India

c.England cannot benefit from free trade with India

d.England uses fewer resources to produce rugs than India

e.India uses fewer resources to produce rugs than England

69.              If Israel has a lower opportunity cost producing oranges than Canada, then compared to
                            Canada’s orange production, it

a.is less efficient in producing other goods

b.has an absolute advantage producing oranges

c.cannot export oranges to other countries successfully

d.has a comparative advantage producing oranges

e.will have reason to import oranges

70.              If the United States can produce both wine and chocolate at a lower resource cost than
                            France,

a.both countries can still benefit from specialization and international trade

b.only the United States can benefit from specialization and international trade

c.only France can benefit from specialization and international trade

d.neither country can benefit from specialization and international trade

e.there will be unknown effects of specialization and international trade

Feb 11 2020 View more View Less

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