173.Explain how the long-run market supply curve for a perfectly competitive industry depends upon
factor prices. How would this apply to the milk producing industry?
174.Define a perfectly competitive market, and list the six conditions necessary for a m
Colander - Chapter 11
Refer to the graph above. Suppose that market price is $5. Given this price, a perfectly
competitive firm should:
A. continue to produce in the short-run but shut down in the long-run.
B. continue to produce in both the
121.A voluntary restraint agreement:
A. is prohibited under the GATT treaty, and has become less common recently.
B. unlike a quota, does not affect the quantity of imports.
C. unlike a tariff, does not affect the price of imports.
D. raises the price of
World trade declined in the 1930s. Which of the following is the best explanation of that
A. World income shrank and trade restrictions increased.
B. World income shrank but there were few changes in trade restrictions.
C. Trade rest
164.Refer to the graph below.
The graph demonstrates Saudi Arabia's and the United States' production possibility curves for
widgets and wadgets. Given these production possibility curves, you would suggest that:
A. Saudi Arabia specialize in widgets and
Based on the above information, a perfectly competitive profit-maximizing firm would produce:
A. 10 units of output.
B. 20 units of output.
C. 30 units of output.
D. 40 units of output.
Producing less than 30 units reduces profits since the m
109.The central goal of the General Agreement on Tariffs and Trade (GATT) was to:
A. promote free trade associations and customs unions.
B. ensure a balance of trade between countries.
C. reduce trade barriers.
D. promote international security.
85. The text calls the type of comparative advantage that is not easily changed, such as climate,
A. stable comparative advantage.
B. inherent comparative advantage.
C. equilibrium comparative advantage.
D. permanent comparative advantage.
86. The text re
98. In the early 2000s, China taxed its textile exports when the international quota system for textiles
expired. Many countries were worried about rapid Chinese expansion into textiles, and there was
discussion of new tariffs and quotas to slow an antici
70. When Ross Perot ran for president as a third party candidate in 1992, he argued that free trade
with Mexico would result in massive job losses in the U.S. because Mexican wages were so low.
Which of the following is the best explanation of why few eco
46. Refer to the table above. Which of the following statements is true?
A. Gains from trade are possible for both countries.
B. Only Kiribati will benefit from trade with Tuvalu.
C. Only Tuvalu will benefit from trade with Kiribati.
D. No gains from trad
34. Isolationism, a policy of trying to minimize a nation's political and economic interactions with the
rest of the world,
A. has always been key part of American politics.
B. was important until the late 19th century and then declined.
C. rose in Americ
58. Myopia and Utopia are two countries with equivalent resources. The country of Myopia can
produce up to 100 tons of yak butter or up to 5,000 prayer wheels, if it devotes all its resources to
yak butter or all its resources to prayer wheels. Similarly,
20. Many call centers providing telephone customer services for U.S. companies have been
established in India while few or none have been established in China. Why?
A. China is at a more advanced stage of economic development than India.
B. China lacks th
1. The U.S. has a trade deficit when the value of goods and services we import exceeds the value of
goods and services we export.
2. We can conclude from the table above that Spain has a comparative advantage in the produc
149.The public tends to view monopolies less favorably than the economists because:
A. the public ignores normative arguments in favor of monopoly.
B. the public believes that the welfare cost of resource misallocation is greater than economic
164.If P = Q/15 represents market supply for a competitive industry and market demand is given by
Qd = 500 -10P, then the equilibrium price is:
165.If MC = Q/15 represents marginal cost for a monopolist and mark
178.Refer to the graph below.
Which rectangle represents the monopolist's profit?
B. A + B + C.
C. C + D.
D. None of the above.
179.Refer to the graph below.
The monopolist represented is:
A. making a profit.
B. making a loss.
C. making zero profit.
178.Explain why economists' and laypeoples' views of outsourcing differ.
179.Three policies used to restrict trade are: tariffs, quotas and regulatory trade restrictions. Discuss
each of these policies.
180.Eight reasons why countries impose trade restric
190.Define tariffs and Quotas, and explain the similarities and differences between them.
191.You are an influential CEO of a company like Wal-Mart, that imports foreign made clothing. The
government wants to restrict the quantity of the product that your
202.What is dumping and why do countries dislike it?
203.Seamus "Skip" Cavanaugh often travels between Switzerland and Ireland. During his travels he
has noticed that the two countries rarely trade with each other. He also noticed that the
When comparative advantage is based on transferable factors, the law of one price tends to:
A. erode it away.
B. amplify it.
C. stabilize it.
D. make it into an inherent comparative advantage.
The eroding away of transferable comparative adva
If some goods exhibit economies of scale, then:
A. the countries producing these goods gain from trade while other countries are worse off.
B. the countries producing these goods lose from trade while other countries are better off.
C. all co
The text mentions ten sources of U.S. comparative advantage. Which of the following is NOT
one of them?
A. Wealth from past production
B. English is the international language of business
C. U. S. natural resources
D. Weak environmental
Gains from trade:
A. tend to be greater for large countries than for small ones.
B. tend to be smaller for countries producing goods with economies of scale.
C. exist only when a country has an absolute advantage in at least one product.
Why are the gains from trade often difficult to recognize?
A. The United States does not keep accurate records of employment.
B. The gains are spread out over a wide variety of goods and consumers.
C. There are no gains from trade.
Refer to the table above. Zimbabwe's opportunity cost of producing gold (in terms of nickel) is:
To produce eighteen more units of gold, Zimbabwe must give up 30 units of nickel, or 5/3 units
of nickel for each un
Refer to the table above. In Kiribati, the opportunity cost of producing one mango (in terms of
Since Kiribati can produce 100 more mangoes only by giving up 400 coconuts, Kiribati's
Colander - Chapter 21 #55
Learning Objective: 21-2
Colander - Chapter 21
Refer to the graph above. We can conclude from the diagram that:
A. Islandia has a comparative advantage in both goods
Assume that in Canada the opportunity cost of producing 1 television set is 2 bushels of
wheat. Assume that in the U.S. the opportunity cost of producing 1 bushel of wheat is 2
television sets. If these two countries specialize according