2021 Economics Unit 7 International Trade

The diagram shows the production possibilities curve for Country Y. Which of the following statements is true?

• If Country Y is producing at point C, it is using all its resources efficiently
• The opportunity cost of producing more machines is constant
• Country Y cannot produce at point E
• The most efficient point of production is point D

Comparative advantages show:

• outcomes without trading

• who can make more items

• competition within countries

• who should produce what item at the lowest cost

What type of advantage shows who can make the most item?

• absolute advantage

• comparative advantage

Ana takes 30 minutes to wash the dishes and one hour to vacuum the house. Her husband, Joe, takes 15 minutes to wash the dishes and 45 minutes to vacuum. Who has the absolute advantage for vacuuming?

• Ana

• Joe

Good and services produced at home and sold in other countries

• Imports
• Exports
• Specialization
• Globalization

Why are most countries better off specializing in the production of particular goods, and then trading with other nations to obtain whatever else they need? 

• Transportation costs are lower than they were a century ago.
• Resources are not evenly distributed among countries.
• Greater investment of capital goods increases productivity.
• People have limited resources to satisfy unlimited wants. 

An embargo is  a complete ban on certain products coming in or leaving the country?

• True
• False

Who has the comparative advantage in cake production?

• Sarah
• Mari

In 1962, the United States prohibited all imports and exports to and from Cuba.

• Tariff
• Embargo
• Quota

What is a tariff?

• A government order to stop trade
• A limit placed on imports
• A tax placed on imports