Econ1B03-qCh19 - 1 Chapter 19 International Trade 1 In 2000...

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Unformatted text preview: 1 Chapter 19 International Trade 1. In 2000, two major exports for the United States were a. clothing and office machines. b. wheat and coal. c. footwear and fish. d. coffee and diamonds. e. none of the above ANS: b 2. In 2000, which of the following was a major import for the United States? a. corn b. soybeans c. coal d. coffee e. none of the above ANS: d Exhibit 19-1 United States France Good X Good Y Good X Good Y 120 60 80 10 40 20 40 20 20 40 30 60 For questions 3-12, refer to Exhibit 19-1 above. 3. Refer to Exhibit 19-1. The opportunity cost of one unit of Y in the United States is a. 3X. b. 10X. c. 4X. d. 5X. ANS: c 4. Refer to Exhibit 19-1. The opportunity cost of one unit of Y in France is a. 1X. b. 2X. c. 3X. d. 4X. ANS: a 90 91 Chapter 19 5. Refer to Exhibit 19-1. France is the lower opportunity cost producer of a. good X. b. good Y. c. goods X and Y. d. neither good X nor good Y. ANS: b 6. Refer to Exhibit 19-1. The opportunity cost of one unit of X in the United States is a. 0.25Y. b. 4Y. c. 10Y. d. 0.5Y. ANS: a 7. Refer to Exhibit 19-1. The United States is the lower opportunity cost producer of a. good Y. b. both goods. c. neither good. d. good X. ANS: d 8. Refer to Exhibit 19-1. If the United States is to specialize in the production of one of the two goods (and then trade that good to France), which good should it be and why? If France is to specialize in the production of one of the two goods (and then trade that good to the United States), which good should it be and why? a. Good X for the United States because the United States is the higher opportunity cost producer of good X; good Y for France because France is the higher opportunity cost producer of good Y. b. Good Y for the United States because the United States is the lower opportunity cost producer of good Y; good X for France because France is the lower opportunity cost producer of good X. c. Good X for the United States because the United States is the lower opportunity cost producer of good X; good Y for France because France is the lower opportunity cost producer of good Y. d. Good Y for the United States because the United States is the higher opportunity cost producer of good Y; good X for France because France is the higher opportunity cost producer of good X. ANS: c 9. Refer to Exhibit 19-1. Considering the data, which of the following terms of trade would both countries agree to? a. 4.5X = 1Y b. 0.5X = 1Y c. 5X = 1Y d. 3X = 1Y ANS: d International Trade 92 10. Refer to Exhibit 19-1. Suppose that in the no specialization-no trade (NS-NT) case, the United States produces 80X and 10Y, and France produces 20X and 40Y. In the specialization-trade (S-T) case, the two countries agree to trade 40X for 20Y. Assuming that each country specializes in the production of the good in which it has a comparative advantage, the United States can consume __________ more units of good __________ in the S-T case than in the NS-NT case, and France can consume __________ more units of good __________ in the S-T case than in the NS-NT case.can consume __________ more units of good __________ in the S-T case than in the NS-NT case....
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This note was uploaded on 04/17/2010 for the course ECONOMICS 1b03 taught by Professor Holmes during the Winter '10 term at McMaster University.

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Econ1B03-qCh19 - 1 Chapter 19 International Trade 1 In 2000...

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