Question :
71) According to David Ricardo’s principle of comparative advantage, there : 1384520
71) According to David Ricardo’s principle of comparative advantage, there will be gains from international trade
A) only by a country with an absolute advantage in the production of some commodity.
B) only by developed countries.
C) by any trading country with opportunity costs similar to other countries.
D) by only one country if opportunity costs are identical across countries.
E) by any country with opportunity costs different from other countries.
72) When specialization according to comparative advantage also makes economies of scale possible,
A) trade is not beneficial to the country that has the absolute advantage in both goods.
B) the production possibilities boundaries of all trading countries will shift inward.
C) there will be additional gains from trade.
D) costs will rise in all trading countries.
E) it will be beneficial for all trading countries to impose tariffs.
73) The idea that unit production costs fall as producers become more familiar with a new production process is known as
A) an Edgeworth box.
B) an opportunity cost curve.
C) an isoquant map.
D) learning by doing.
E) intra-industry trade.
74) In addition to realizing the benefits of specialization according to comparative advantage, a nation that engages in international trade and specialization may realize benefits from
A) economies of scale and learning by doing.
B) diseconomies of scale and learning by doing.
C) learning by doing and increased opportunity costs.
D) a devaluation of its currency.
E) a less diversified economy.
75) A country with a ________ domestic market is most likely to gain from international trade, in part because of its prospects of benefitting from ________.
A) small; diseconomies of scale and learning by doing
B) small; economies of scale and learning by doing
C) large; a less diversified economy
D) mature; a devaluation of its currency
E) mature; a less diversified economy
76) North America exports clothing to the European Union, and the European Union exports clothing to North America. This is a(n)
A) violation of the law of comparative advantage.
B) obvious failure to take advantage of specialization.
C) likely result of economies of scale and product differentiation.
D) general conclusion of the Heckscher-Ohlin theory.
E) example of the inefficiency of trade patterns.
77) Economies of scale and product differentiation can provide an explanation for
A) countries remaining at their autarkic positions.
B) countries trading in completely different products.
C) countries trading in similar products.
D) firms seeking government intervention to protect their industries.
E) firms seeking government approval of mergers.
78) Economies of scale and product differentiation can provide an explanation for
A) countries remaining at their autarkic positions.
B) countries trading in completely different products.
C) the imposition of trade barriers.
D) intra-industry trade.
E) absolute advantage.
79) International trade permits a country to
A) produce and consume beyond its production possibilities boundary.
B) shift its production possibilities boundary outward.
C) increase its absolute advantage for its imported goods.
D) expand its production possibilities while holding constant its consumption possibilities.
E) consume beyond its production possibilities boundary.
80) Canadian politicians who promoted the NAFTA in the early 1990s claimed that Canadian producers would have access to a larger market and thus costs would decline. Which of the following sources of the gains from trade are implied by this statement?
A) climate
B) economies of scale
C) comparative advantage
D) factor endowments
E) absolute advantage
