Trade

When determining comparative advantage one must determine 

• Opportunity cost
• Specialization
• Absolute Advantage
• Embargos 

If I am better at all types of production, I have the ______ in all forms of production.

• Comparative advantage
• Specialization
• Absolute advantage
• developed nation

Based on the table provided, which one of the following statements is correct?

• Japan has the absolute advantage in producing cars
• Japan has the comparative advantage in producing cars
• The United States has the absolute advantage in producing both cars and computers
• The opportunity cost of producing a car in Japan is 1/2 a computer

Suppose that in one week Sam can knit 5 sweaters or make 4 blankets and Rob can knit 10 sweaters or make 6 blankets. Which of the following is true?

• Sam has an absolute advantage in making blankets
• Sam has neither a comparative nor an absolute advantage in knitting sweaters or making blankets
• Sam has a comparative advantage in making blankets
• Sam has a comparative advantage in knitting sweaters

Countries will export goods and services that they can produce at lower costs. This is called —

• oligarchy

• monopoly

• comparative advantage

• capitalism

Which of the following is NOT an effect of comparative advantage on international trade?

• Nations monitor the percentage of their urban population.

• It makes efficient use of human resources.

• Nations produce goods and services they can sell for a profit.

• It influences the development of a variety of industries.

Because the Earth’s resources are not evenly distributed across its surface —

• global economic interdependence is declining.

• most countries have the resources they need to survive and grow.

• countries must engage in trade to get the goods they need to survive.

• most people in the world are engaged in tertiary economic activities.

Which terms of trade would benefit both countries? 

• 1 round of ammunition traded for 1/10 unit of gun
• 1 gun traded for 3 rounds of ammunition
• 2 guns traded for 4 rounds of ammunition
• 6 amo traded for 90 guns

The US can produce 200 airplanes or 400 trucks. Japan can produce 300 trucks or 100 airplanes. 
Which country has the comparative advantage in producing trucks and what is their opportunity cost? 

• Japan, 1/3 airplane per truck
• US, 1/2 airplane per truck
• US, 2 airplanes per truck
• Japan, 3 airplanes per truck

A nation has this type advantage when it can produce a good at a lower opportunity cost than another person or nation.

• Absolute Advantage
• Comparative Advantage
• Complete Advantage
• Controlling Advantage