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quiz 17ma - d The U.S has the comparative advantage in cars...

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Quiz 17 (34). 1. The theory of comparative advantage states that trade is to the advantage of both country A and country B when: a. A and B impose equal tariffs. b. A produces one good a little more cheaply than B does, and another good of a great deal more cheaply . c. Transportation costs are low between A and B. d. Consumer tastes differ significantly in A and B. 2. Suppose that, in the absence of trade, one worker in the U.S. can produce, in one year, 3 computers or 3 cars, while one worker in Germany can produce 1 computer or 2 cars. When free trade is opened between the two countries, the common, international price ratio is likely to be about: a. 1 computer exchanges for 2.5 cars. b. 1 computer exchanges for 2 cars. c. 1 computer exchanges for 1.5 cars. d. 1 computer exchanges for 1 car. 3. In question 2: a. Germany has the absolute advantage in both goods. b. The U.S. has the absolute advantage in both goods . c. Germany has the comparative advantage in computers.
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Unformatted text preview: d. The U.S. has the comparative advantage in cars. 4. Which of the following is probably an unfair trade practice? a. A country produces export goods with a low-wage labor. b. A country tariffs against imports from abroad. c. A country’s food and drug relations apply to imports. d. A country’s government subsidizes its export industries . 5. If a tariff and a quota lead to identical cuts in imports: a. No reason exists to choose one over the other. b. The tariff is probably more efficient . c. The quota is probably more efficient. d. Both should be imposed together. 6. If the U.S. were to eliminate all tariffs: a. Consumers would gain, but some producers would suffer. b. Every American would benefit. c. Almost all Americans would be poorer and less secure. d. Workers would gain because import prices would rise....
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