Question : 19.3   How Countries Gain from International Trade 1) A situation in : 1267016

 

19.3   How Countries Gain from International Trade

1) A situation in which a country does not trade with other countries is called

A) autarky.

B) self-actualization.

C) autonomy.

D) independence.

2) The ratio at which a country can trade its exports for imports from other countries is called

A) a trade barrier.

B) the terms of trade.

C) autarky.

D) a free trade agreement.

3) Countries that engage in trade will tend to specialize in the production of goods and services in which they have ________ and will ________ these goods and services.

A) a comparative advantage; import

B) an absolute advantage; export

C) a comparative advantage; export

D) an absolute advantage; import

4) Examples of ________ show how trade between two countries can make each better off.   

A) absolute advantage

B) comparative advantage

C) autarky

D) trade barriers

5) In the real world we don’t observe countries completely specializing in the production of goods for which they have a comparative advantage.  One reasons for this is

A) comparative advantage works better in theory than in practice.

B) some countries have more resources than other countries.

C) tastes for many traded goods are similar in many countries because of globalization.

D) production of most goods involves increasing opportunity costs.

6) Tastes for products such as beer differ. As a result

A) we see countries specializing completely in the production of beer.

B) consumers of beer have difficulty deciding what type of imported beer to buy.

C) the quality of imported beer is less than it could be.

D) different countries may each have a comparative advantage in producing different types of beer.

7) A consequence of increasing marginal costs of producing digital music players in Japan is

A) Japan will not export digital music players.

B) Japan will stop short of complete specialization in the production of digital music players.

C) Japan will import digital music players from countries that don’t experience increasing marginal costs.

D) Japan will likely impose trade restrictions on imported digital music players.

8) Which of the following statements is true?

A) All individuals in both countries are made better off as a result of international trade. 

B) Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall.

C) Although some individuals are made better off as a result of international trade, both countries may be made worse off overall.

D) Each country as a whole is made better off as a result of international trade, but individuals within each country may be made worse off.

9) A Federal Reserve publication proclaimed that “Trade is a win-win situation for all countries that participate.”  This statement is

A) false since it ignores the workers who lose their jobs as result of international trade.

B) false since not all countries participate in international trade.

C) true because it refers to countries; individuals may be losers as a result of international trade.

D) true because all consumers and workers benefit from international trade.

10) Which of the following is not a source of comparative advantage?

A) relative abundance of labor and capital

B) technology

C) climate and natural resources

D) a strong foreign currency exchange rate

 

 

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