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week 5 - Principles of Economics Problem Set for Week 5 Due...

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Principles of Economics Problem Set for Week 5 Due: online 10pm April.6, Tuesday I. Choose one answer that fits the best. (4 points each for questions 1-14, 3 points each for questions 15-27, total 95 points) 1. If the United States exports cars to France and imports cheese from Switzerland, a. the United States has a comparative advantage in producing cars, and Switzerland has a comparative advantage in producing cheese. b. the United States has a comparative advantage in producing cheese, and Switzerland has a comparative advantage in producing cars. c. the United States and France would both be better off if they each produced cars and cheese. d. Comparative advantage cannot be determined without knowing absolute prices. 2. When a country allows trade and becomes an importer of a good, which of the following would NOT be true? 3. The world price of yo- yo’s is $4.00 each. The pre -trade price of yo- yo’s in Taiwan is $3 .50 each. If Taiwan allows trade in yo- yo’s we know that Taiwan will 4. A tariff is a tax placed on
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