Chapter 5 Test-1 - Chapter 5 Student/Class Time 1 Which of...

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Chapter 5 Student/Class Time:_______________________________________________________________ 1. Which of the following concepts provides the basic rationale for international trade? A. increasing opportunity costs. B. consumer sovereignty. C. comparative advantage. D. the law of supply. 2. Refer to the above data. The domestic opportunity cost of producing 1 ton of steel in Alpha is: A. ½ ton of wheat. B. 1 ton of wheat. C. 15 tons of wheat. D. 30 tons of wheat. 3. Refer to the above data. The domestic opportunity cost of producing 1 ton of steel in Omega is: A. ½ ton of wheat. B. 2 tons of wheat. C. 3 tons of wheat. D. 5 tons of wheat. 4. Refer to the above data. After specialization, Alpha will produce: A. 60 tons of steel and Omega will produce 45 tons of wheat. B. 20 tons of steel and Omega will produce 60 tons of wheat. C. 60 tons of steel and Omega will produce 60 tons of wheat. D. 30 tons of steel and Omega will produce 30 tons of wheat. 5. According to the concept of comparative advantage, a good should be produced in that nation where: A. its domestic opportunity cost is greatest. B. money is used as a medium of exchange. C. its domestic opportunity cost is least. D. the terms of trade are maximized.
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6. The terms of trade: A. show the ratio at which nations will exchange two goods. B. show how the gains from trade can be equally shared. C. show the value of one nation's currency in terms of another nation's currency. D. compare the volume of a nation's exports and imports. 7. The primary benefits of international trade include: A. the more efficient use of world resources and higher living standards. B. greater stability of domestic output, employment, and the price level.
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This note was uploaded on 06/14/2009 for the course ECON 2301-48701 taught by Professor Harryledbetter during the Spring '09 term at Tarrant County.

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Chapter 5 Test-1 - Chapter 5 Student/Class Time 1 Which of...

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