Question : 31) Refer to Table 19.2. ________ has a comparative advantage : 1381270

 

31) Refer to Table 19.2. ________ has a comparative advantage in motorcycles and ________ has an absolute advantage in motorcycles.

A) China; neither

B) Neither; neither

C) Thailand; neither

D) Thailand; China

 

32) Refer to Table 19.2. If both countries specialize and trade with each other, Thailand will export ________ and China will import ________.

A) motorcycles; tractors

B) tractors; motorcycles

C) tractors; tractors

D) motorcycles; motorcycles

 

33) Refer to Table 19.2. The most that Thailand will be willing to pay for a tractor is

A) 5 motorcycles.

B) 10 motorcycles.

C) 15 motorcycles.

D) 20 motorcycles.

 

34) Refer to Table 19.2. The most that China will be willing to pay for a motorcycle is

A) 1/30 of a tractor.

B) 1/20 of a tractor.

C) 1/10 of a tractor.

D) 1/5 of a tractor.

35) Refer to Table 19.2. Which terms of trade benefits both countries?

A) 1 tractor for 10 motorcycles

B) 1 tractor for 12.5 motorcycles

C) 1 motorcycle for 10 tractors

D) 1 motorcycle for 1/5 of a tractor

 

36) The terms of trade refers to

A) the documents that two countries sign in order to facilitate trade.

B) the conditions imposed by the importing country regarding the quality of the imported goods.

C) the exchange rate determined by the exporting and the importing countries.

D) the ratio at which one country trades a domestic product for imported product.

 

37) Specialization and trade allow a country to

A) produce and consume on its production possibility frontier.

B) produce and consume inside its production possibility frontier.

C) produce and consume outside its production possibility frontier.

D) produce on its production possibility frontier and consume outside it.

 

38) The main advantage of trade between two countries is that

A) trade makes both countries more self-sufficient.

B) employment in both countries will increase.

C) both countries have consumption choices beyond their current resource and production constraints.

D) trade will lead to a more equitable distribution of income in both countries.

39) According to comparative advantage, trade between two countries

A) maximizes the amount of inputs that are used in the production of all products.

B) guarantees that consumption levels will be equal in the two countries.

C) will benefit all the industries in each of the countries.

D) allows each of the trading countries to allocate its resources most efficiently.

 

40) When countries specialize in producing those goods in which they have a comparative advantage, they

A) maximize their combined output, but they do not necessarily allocate their resources more efficiently.

B) maximize their combined output and allocate their resources more efficiently.

C) allocate their resources more efficiently, but they do not necessarily maximize their combined output.

D) do not necessarily maximize their combined output, and they also do not necessarily allocate their resources more efficiently.

 

 

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