Question 1 of 20 2.5
Points
Labor productivity is:
A. The number of units of output that a worker can produce
in one hour.
B. The total number of units that all workers in a firm
produce in one day.
C. The number of hours it takes a worker to produce one unit
of output.
D. The total number of hours it takes all the workers in a
firm to produce a dayâs output
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Question 2 of 20 2.5
Points
In the two-country, two-good model, which of the following
is true?
I. As a result of trade, at least one country is better off
and that countryâs gain does not reduce the economic welfare of the other
country.
II. Both countries can gain from trade by dividing the
benefits of the enhanced global production.
A. I
B. II
C. Both I and II
D. Neither I nor II
Question 3 of 20 2.5
Points
Refer to Table 3.1. Given the productivity information in
Table 3.1, the Rest of the World has an absolute advantage in the production of
__________ and the United Kingdom has an absolute advantage in the production
of __________.
A. Umbrellas; corn
B. Corn; umbrellas
C. Corn; neither good
Question 4 of 20 2.5
Points
Table 3.1
Refer to Table 3.1. If the United Kingdom shifts 1 hour of
labor from the production of corn to the production of umbrellas and the Rest
of the World shifts 1 hour of labor from the production of umbrellas to the production
of corn, total world production of corn will __________ by __________ units and
total world production of umbrellas will __________ by __________.
A. Increase; 1; decrease; 1
B. Increase; 1.43; increase 1
C. Increase; 0.5; increase; 0.5
D. Decrease; 0.5; increase; 0.7
Question 5 of 20 2.5
Points
Table3.2
Refer to Table 3.2. The United Kingdom has an absolute
advantage in the production of __________ and the Rest of the World has an
absolute advantage in the production of __________.
A. Neither good; corn
B. Neither good; both goods
C. Both goods; neither goods
D. Corn; umbrellas
Question 6 of 20 2.5 Points
Table 3.2
Refer to Table 3.2. The opportunity cost of producing a unit
of corn in the United Kingdom is __________ umbrellas and the opportunity cost
of producing a unit of corn in the Rest of the World is __________ umbrellas.
A. 1/8; 1/3
B. 1/3; 1/8
C. 3; 8
D. 8; 3
Question 7 of 20 2.5
Points
Table 3.4
Refer to Table 3.4. Once trade between the United States and
France opens, we can anticipate that the international price of wine will be
between __________ and __________.
A. 1 pound of cheese; 4 pounds of cheese
B. 0.5 pounds of cheese; 4 pounds of cheese
C. 1 pound of cheese; 2 pounds of cheese
D. 0.5 pounds of cheese; 2 pounds of cheese
Question 8 of 20 2.5 Points
Table 3.4
Refer to Table 3.4. Once trade between the United States and
France opens, we can anticipate that the international price of cheese will be
between __________ and __________.
A. 1 gallon of wine; 0.5 gallons of wine
B. 2 gallons of wine; 4 gallons of wine
C. 2 gallons of wine; 0.25 gallons of wine
D. 1 gallon of wine; 4 gallons of wine
Question 9 of 20 2.5 Points
Which of the following is NOT true about a nationâs
production-possibility curve?
A. The production-possibility curve shows all the amounts of
different products that an economy can produce when its resources are fully
employed.
B. Points inside the production-possibility curve are
feasible, but may represent unemployment of some of the economyâs resources.
C. Points outside the production-possibility curve are not
feasible production points given the resources in the economy.
D. The production-possibility curve shows how the country
gains from trade.
Question 10 of 20 2.5 Points
Figure 3.1
Refer to Figure 3.1. The opportunity cost of one unit of
corn production in Canada is __________ liters of maple syrup and in the Rest
of the World is __________ liters of maple syrup.
A. 9/7; 2
B. 7/9; 2
C. 9/7; 1/2
D. 7/9; 1/2
Question 11 of 20 2.5 Points
Assume that Country X produces two goodsâsugar and shoesâand
that the countryâs production possibility curve is âbowed-outâ. As the country
produces more sugar:
A. The opportunity cost of sugar in terms of shoes foregone
will increase.
B. The opportunity cost of sugar in terms of shoes foregone
will decrease.
C. The opportunity cost of shoes in terms of sugar foregone
will increase.
D. The opportunity cost of sugar in terms of shoes foregone
will be the same.
Question 12 of 20 2.5 Points
In the two-country, two-good model with an increasing-cost
production-possibility curve, the amount of both goods that are produced in the
economy in autarky is determined by:
A. Relative prices.
B. Factor endowments.
C. Community indifference curves.
D. Labor productivity.
Question 13 of 20 2.5
Points
Figure 4.1
Refer to Figure 4.1. In autarky Canada will produce at point
__________ and consume at point __________.
A. S1; C1
B. S0; C0
C. S1; C0
D. S0; C1
Question 14 of 20 2.5
Points
Figure 4.1
Refer to Figure 4.1.
After the opening up of international trade, Canada will produce at point
__________ and consume at point __________.
A. S1; C1
B. S0; C0
C. S1; C0
D. S0; C1
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Question 15 of 20 2.5
Points
The United States is relatively capital-abundant because:
A. Capital costs more in the United States than in the rest
of the world.
B. The United States has more capital than the rest of the
world.
C.
The United States produces more high-tech goods than the
rest of the world.
D. The ratio of capital to other factors of production is
greater in the United States than the rest of the worldâs ratio of capital to
other factors of production.
Question 16 of 20 2.5
Points
China has 20% of the worldâs population but only 10% of the
worldâs farmable land. The Heckscher-Ohlin theory of trade would predict which
of the following for China following the opening of trade?
A. China will export land-intensive goods like wheat and
import labor-intensive goods like clothing.
B. China will shift resources into the production of
agricultural goods and away from manufactured goods.
C. China will shift resources out of the production of
agricultural goods and into the production of labor-intensive goods.
D. China will export capital-intensive goods like
automobiles and import labor-intensive goods like clothing.
Question 17 of 20 2.5
Points
Assume a two-country, two-good, two-factor of production
world with the countries being the United States and the Rest of the World, the
two goods being steel and wheat, and the two factors of production being
capital and land. If the United States was capital-abundant and steel
production was capital-intensive, the Heckscher-Ohlin model would predict that
the United States would export __________ and import __________.
A. Steel; wheat
B. Wheat; steel
C. Steel; steel
D. Wheat; wheat
Question 18 of 20 2.5
Points
Use the following
information to answer questions below
Assume a two-country, two-good, two-factor of production
world where the following relationships hold:
(K/L)US
> (K/L)ROW
(K/L)automobiles
> (K/L)shoes
Where (K/L)US is the capital-labor ratio in the United
States, (K/L)ROW is the capital-labor
ratio in the Rest of the World, (K/L)automobiles is the capital-labor ratio in
the production of automobiles, and (K/L)shoes is the capital-labor ratio in the
production of shoes. Assume further that technology and tastes are the same in
the United States and the Rest of the World.
The relationships
shown above indicate that the United States is
A. A capital-intensive country.
B. Scarce in land.
C. A labor-abundant country.
D. A capital-abundant country.
Question 19 of 20 2.5
Points
Use the following
information to answer question below
Assume a two-country, two-good, two-factor of production
world where the following relationships hold:
(K/L)US
> (K/L)ROW
(K/L)automobiles
> (K/L)shoes
Where (K/L)US is the capital-labor ratio in the United
States, (K/L)ROW is the capital-labor
ratio in the Rest of the World, (K/L)automobiles is the capital-labor ratio in
the production of automobiles, and (K/L)shoes is the capital-labor ratio in the
production of shoes. Assume further that technology and tastes are the same in
the United States and the Rest of the World.
The relationships
shown above indicate that the production of shoes is:
A. Capital-intensive.
B. Labor-intensive.
C. Labor-abundant.
D. Capital-abundant.
Question 20 of 20 2.5
Points
Use the following
information to answer question below
Assume a two-country, two-good, two-factor of production
world where the following relationships hold:
(K/L)US
> (K/L)ROW
(K/L)automobiles
> (K/L)shoes
Where (K/L)US is the capital-labor ratio in the United
States, (K/L)ROW is the capital-labor
ratio in the Rest of the World, (K/L)automobiles is the capital-labor ratio in
the production of automobiles, and (K/L)shoes is the capital-labor ratio in the
production of shoes. Assume further that technology and tastes are the same in
the United States and the Rest of the World.
The relationships
shown above indicate that the United States has a comparative advantage in the
production of __________ while the Rest of the World has a comparative
advantage in the production of __________.
A. Both goods; neither good
B. Shoes; automobiles
C. Automobiles; shoes
D. Neither good; both goods
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