CHAPTER 3 Answers

CHAPTER 3 Answers - Sample Questions Answers CHAPTER 3...

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Unformatted text preview: Sample Questions. Answers CHAPTER 3 Multiple Choice 1. Trade between two countries can benefit both countries if A) each country exports that good in which it has a comparative advantage.* B) each country enjoys superior terms of trade. C) each country has a more elastic demand for the imported goods. D) each country has a more elastic supply for the exported goods. E) each country produces a wide range of goods for export. 2. A country engaging in trade according to the principles of comparative advantage gains from trade because it A) is producing exports indirectly more efficiently than it could alternatively.* B) is producing imports indirectly more efficiently than it could domestically. C) is producing exports using fewer labor units. D) is producing imports indirectly using fewer labor units. E) is producing exports while outsourcing services. 4. Given the information in the table above, if it is ascertained that Foreign uses prison-slave labor to produce its exports, then home should A) export cloth.* B) export widgets. C) export both and import nothing. D) export and import nothing. E) export widgets and import cloth. 5. Given the information in the table above, if the Home economy suffered a meltdown, and the Unit Labor Requirements doubled to 20 for cloth and 40 for widgets then home should A) export cloth.* B) export widgets. C) export both and import nothing. D) export and import nothing. E) export widgets and import cloth. 6. ) Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in Japan are $10 per hour. Production costs would be lower in the United States as compared to Japan if A) U.S. labor productivity equaled 40 units per hour and Japan's 15 units per hour.* B) U.S. labor productivity equaled 30 units per hour and Japan's 20 units per hour. C) U.S. labor productivity equaled 20 units per hour and Japan's 30 units per hour. D) U.S. labor productivity equaled 15 units per hour and Japan's 25 units per hour....
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This note was uploaded on 09/01/2011 for the course ECON 3150 taught by Professor Allalileeva during the Summer '09 term at York University.

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CHAPTER 3 Answers - Sample Questions Answers CHAPTER 3...

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