Question : 52) Assume that Down Slope specializes in producing snow boards : 1381558

52) Assume that Down Slope specializes in producing snow boards and Seven Seas specializes in producing scuba tanks. After trade, Down Slope exports 2,000 snow boards and imports 500 scuba tanks. The terms of trade

D) cannot be determined from this information.

53) When trade is ________, patterns of trade and trade flows result from the independent decisions of thousands of importers and exporters, as well as millions of private households and firms.

A) restricted

B) barred

C) free

D) embargoed

54) If you are traveling in Thailand and you purchase a meal that costs 1,400 baht and the current exchange rate is 35 baht to the dollar, then the price of the meal in U.S. currency is

A) $400.

B) $40.

C) $4.

D) $0.40.

55) Suppose a U.S. dollar exchanges for 0.8 euros, then each euro is worth

A) $1.25.

B) $1.20.

C) $0.80.

D) $0.20.

56) If the price of a truck in the United States is $25,000, and the exchange rate between the dollar and the euro falls from $1.50 to $1.30 per euro, then the price of the American truck in the EU will

A) rise.

B) fall.

C) remain the same.

D) be irrelevant, because the EU will impose restrictions on imports from the United States.

57) If the price of a truck in the United States is $18,000, and the exchange rate between the dollar and the Argentine peso falls from 10 pesos to 8 pesos per dollar, then the price of the American truck in Argentina will

A) rise.

B) fall.

C) remain the same.

D) be irrelevant, because the Argentine government will impose restrictions on imports from the United States.

58) For ________, there is a range of exchange rates that can lead automatically to both countries realizing the gains from specialization and comparative advantage.

A) any pair of countries

B) very few countries

C) only industrialized countries

D) only democratic countries

Refer to the information provided in Table 19.3 below to answer the questions that follow.

Table 19.3

59) Refer to Table 19.3. If the exchange rate is $1 = 1 euro, then

A) the United States will import both peas and carrots.

B) France will import both peas and carrots.

C) the United States will import carrots and France will import peas.

D) France will import carrots.

60) Refer to Table 19.3. If the exchange rate is $1 = 3 euros, then

A) the United States will import both peas and carrots.

B) France will import both peas and carrots.

C) the United States will import carrots and France will import peas.

D) the United States will import peas and France will import carrots.

61) Refer to Table 19.3. If the exchange rate is $1 = 2 euros, then

A) the United States will import both peas and carrots.

B) France will import both peas and carrots.

C) the United States will import peas and France will import carrots.

D) France will import peas.

62) Refer to Table 19.3. Trade will flow in both directions between countries only if the price of the euro is between

A) $1.00 and $2.25.

B) $.44 and $1.00

C) $.40 and $.50.

D) $.60 and $.75.