Question :
41) If two countries each produce wool and cotton, the : 1384517
41) If two countries each produce wool and cotton, the country with the higher opportunity cost for cotton (in terms of wool) will also have
A) a comparative advantage in the production of wool.
B) a comparative advantage in the production of cotton.
C) an absolute advantage in the production of wool.
D) an absolute advantage in the production of cotton.
E) an absolute advantage in the production of both wool and cotton.
42) If two countries each produce wool and cotton, we know that the country with the comparative advantage in cotton will also have a lower
A) opportunity cost to produce wool.
B) opportunity cost to produce cotton.
C) resource input per unit produced of wool.
D) resource input per unit produced of cotton.
E) resource input per unit produced of both cotton or wool.
43) The concept of comparative advantage in international trade is based on ________ as opposed to absolute costs.
A) relative prices
B) absolute prices
C) opportunity costs
D) average cost
E) total cost
44) If Country A has a comparative advantage in the production of good X relative to Country B,
A) then Country A also has an absolute advantage in the production of this good.
B) then Country A also has an absolute advantage in the production of some good other than X.
C) then the opportunity cost of producing X in Country A is higher than in Country B.
D) then the opportunity cost of producing X in Country A is lower than in Country B.
E) we do not have enough information to say anything about relative opportunity costs.
45) If Country A has a comparative advantage in the production of oil relative to Country B, then
A) Country A also has an absolute advantage in producing oil.
B) Country A also has an absolute advantage in producing some good other than oil.
C) the opportunity cost of producing oil is higher in Country A than in Country B.
D) the opportunity cost of producing oil is lower in Country A than in Country B.
E) Country A when compared to Country B must have an absolute advantage in producing some good other than oil.
46) Refer to Table 33-2. If Canada were to transfer one unit of resources from rice to wheat production and if one unit of Indian resources were switched from wheat to rice production,
A) total wheat production would go up by 7 bushels.
B) total rice production would increase by 18 bushels.
C) total wheat production would be decreased by 13 bushels.
D) total rice output would decrease by 8 bushels.
E) both total wheat and total rice production would go up by 7 bushels.
47) Refer to Table 33-2. To achieve the potential gains from international trade,
A) India should export wheat to Canada and import Canadian rice.
B) Canada should produce both wheat and rice and not trade with India.
C) India should export rice to Canada and import Canadian wheat.
D) India should exclude wheat from its consumption.
E) India should produce both wheat and rice and not trade with Canada.
48) Refer to Table 33-2. India has an absolute advantage in the production of
A) rice.
B) wheat.
C) both rice and wheat.
D) neither rice nor wheat.
49) Refer to Table 33-3. The opportunity cost of a barrel of oil in Canada is
A) 16.67 bushels of soybeans.
B) 6 bushels of soybeans.
C) 2.5 bushels of soybeans.
D) 1.25 barrels of oil.
E) 0.8 barrels of oil.
50) Refer to Table 33-3. The opportunity cost of a barrel of oil in Mexico is
A) 0.33 bushels of soybeans.
B) 1.25 barrels of oil.
C) 0.8 barrels of oil.
D) 3 bushels of soybeans.
E) 16 bushels of soybeans.
