200810021150220

# 200810021150220 - Microeconomics Testbank 1(Hubbard/O'Brien...

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Microeconomics – Testbank 1, (Hubbard/O’Brien) Chapter 8: Comparative Advantage and the Gains from International Trade MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Among the losers with an import quota are: A) domestic consumers of the good. B) domestic producers of the good. C) the domestic government. D) All of these groups gain. Answer: A Diff: 2 Page Ref: 231 2) The winner with a tariff on a good not produced domestically is: A) foreign producers of the good affected. B) domestic consumers. C) the government that imposes the tariff. D) all of the above. Answer: C Diff: 2 Page Ref: 245 Refer to Figure 8.1 for the questions below. Figure 8.1 3) In figure 8.1 with free trade the people of the country consume: A) Q1. B) Q2. C) Q3. D) none of the above. Answer: C Diff: 2 Page Ref: 244 4) Among the losers with free trade are: A) consumers because they pay a higher price for imported goods. B) government because national income and tax revenues fall. C) resource owners in an import - competing industry because the industry produces less.

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D) all of the above. Answer: C Diff: 2 Page Ref: 241 5) If nation A can produce 20 power plants and 16 ships, while nation B can produce 18 power plants and 12 ships, then A's opportunity cost to produce a unit of power plants is: A) 0.8 ships. B) 16 ships. C) 8 ships. D) impossible to determine without more information. Answer: A Diff: 3 Page Ref: 236 Refer to Figure 8.1 for the questions below. Figure 8.1 6) In figure 8.1 with free trade domestic producers: A) gain E+F. B) lose C. C) gain C. D) lose E+F. Answer: B Diff: 3 Page Ref: 244 7) With free trade and no transportation costs the domestic price of an imported good: A) remains at the domestic price. B) falls to the world price. C) rises to the world price. D) is set by the domestic government. Answer: B Diff: 2 Page Ref: 244 8) If a nation has a comparative advantage in producing a good or service, this means that: A) using the same amount of resources, this nation can produce the good at a lower opportunity cost than any other nation.
B) the nation has a monopoly in the production of the good. C) using the same amount of resources, this nation can produce more of the good than any other nation. D) the nation is the only possible producer of the good in the world. Answer: A Diff: 2 Page Ref: 235 9) The percent of U.S. manufacturing jobs depend directly or indirectly on exports is: A) eight percent. B) 20 percent. C) zero percent. D) 12 percent. Answer: B Diff: 1 Page Ref: 232 10) If a nation has an absolute advantage in producing a good or service, this means that: A) using the same amount of resources, the nation can produce more of that good than any other nation. B) no other nation can produce the good.

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## This note was uploaded on 05/10/2010 for the course ECO 201 taught by Professor Mikeadkins during the Spring '08 term at KCTCS.

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200810021150220 - Microeconomics Testbank 1(Hubbard/O'Brien...

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