Unit 5: Trade

To focus on producing one thing to improve productivity is known as:

• Specialization
• International trade
• Absolute Advantage
• Supply and Demand

When determining comparative advantage one must take into consideration a persons what?

• Opportunity cost

• Specialization

• Absolute Advantage

• Embargos

If I am the best producer of fruit, I have the __________ in producing fruit.

• Comparative advantage

• Specialization

• Absolute advantage

• developed nation

A trade agreement between Canada, Mexico, and the US

• North America Free Trade Agreement (NAFTA)

• European Union (EU)

• World Trade Organization (WTO)

• Organization of Petroleum Exporting Countries (OPEC)

All of the following are terms used to describe limitations on trade except?

• Trade Barriers

• Sanctions

• Protectionism

• European Union

This trade barrier allows trade but limits the number of products that can be brought into a country.

• Tariff
• Quota
• Embargo
• Subsidy

This is a tax on imports that is used to increase price of foreign products and raise government revenue.

• tariff

• quota

• subsidy

• embargo

This is the most restrictive of the trade barriers a nation can use to close off all importation of a product.

• tariff

• quota

• subsidy

• embargo

Which of the following would MOST LIKELY result when two countries practice comparative advantage? Think = when the one country with the lowest opportunity cost produces what they are good at and they trade for products they are not efficient at producing.

• income in both countries will decrease

• both countries will be better off

• citizens from both countries become equal

• standard of living everywhere decreses

If the USA limits trade on clothing made in China who will benefit?

• American consumers of clothing

• American producers of clothing

• Chinese producers of clothing

• department stores who sell clothing