11) If Russia has a comparative advantage in the production of wheat and China has a comparative advantage in the production of textiles, then
A) neither country has anything to gain from specialization and trade.
B) it is reasonable to expect that specialization will benefit both countries, but trade will not.
C) it is reasonable to expect that specialization and trade will benefit both countries.
D) it is reasonable to expect that trade will benefit both countries, but specialization will not.
12) If Brazil has a comparative advantage in the production of coffee compared to the United States, then
A) Brazil also has an absolute advantage in the production of coffee.
B) the United States has an absolute advantage in the production of coffee.
C) Brazil can produce coffee at a lower opportunity cost than the United States.
D) the United States cannot produce coffee.
13) The United States has a comparative advantage in the production of wheat, and Haiti has a comparative advantage in the production of sugar. If both countries specialize based on the theory of comparative advantage,
A) only the production of wheat will increase.
B) the production and consumption of both goods will increase.
C) only the production of both goods will increase.
D) only the consumption of both goods will increase.
14) Suppose that Japan and India are both engaged in the production of radios and rice, and that Japan has an absolute advantage in the production of both goods. If India has a lower opportunity cost for producing rice, then
A) India has a comparative advantage in rice production, but there will be no gains from specialization and trade.
B) Japan has a comparative advantage in the production of both goods.
C) India has a comparative advantage in the production of rice, but it is outweighed by Japan's absolute advantage in rice production.
D) India has a comparative advantage in the production of rice, and specialization and trade between the two countries can be mutually beneficial.
15) If the slopes of the production possibility frontiers involving sugar and rice in countries A and B are equal,
A) the opportunity cost of producing sugar is less in Country A.
B) the opportunity cost of producing rice is less in Country B.
C) specialization does not benefit either country.
D) each country will produce identical quantities of sugar and rice.
16) Suppose that Argentina and Chile are both engaged in the production of copper and wheat, and that Argentina has an absolute advantage in the production of both goods. If Chile has a comparative advantage in the production of copper, then Chile
A) has a lower opportunity cost for copper, which means that it should specialize in production of copper and engage in trade.
B) has a lower opportunity cost for producing copper, but specialization is not feasible because Argentina has a lower monetary cost of copper production.
C) has a higher opportunity cost for copper, which means it should specialize in the production of wheat and engage in trade.
D) should continue to produce copper, but only for domestic consumption, because trade is not a viable option.
Refer to the information provided in Table 19.1 below to answer the questions that follow.
Table 19.1
17) Refer to Table 19.1. In Mexico, the opportunity cost of 1 bushel of bananas is
A) 1/2 bushel of oranges.
B) 1 bushels of oranges.
C) 2 bushel of oranges.
D) 5 bushels of oranges.
18) Refer to Table 19.1. In Guatemala, the opportunity cost of 1 bushel of oranges is
A) 1/2 bushel of bananas.
B) 1 bushels of bananas.
C) 2 bushel of bananas.
D) 4 bushels of bananas.
19) Refer to Table 19.1. In Mexico, the opportunity cost of 1 bushel of oranges is
A) 1/2 bushel of bananas.
B) 1 bushels of bananas.
C) 2 bushel of bananas.
D) 5 bushels of bananas.
20) Refer to Table 19.1. In Guatemala, the opportunity cost of 1 bushel of bananas is
A) 1/2 bushel of oranges.
B) 1 bushels of oranges.
C) 2 bushel of oranges.
D) 4 bushels of oranges.
