econ slo

• A

• B

• C

• D

Why would governments support trade barriers?

• to close down domestic industries

• to promote international competition

• to help protect young domestic industries

• to increase exports

A main reason nations conduct international trade is because of differences in

• Location

• Resource availabilities

• Tastes

• Income

International trade in goods and services tends to increase the amount of competition facing home manufacturers

• True

• False

The producer with the lowest opportunity cost.

• Comparative Advantage

• Trade Off

• Absolute Advantage

• Opportunity Cost

From the last question, who has the absolute advantage in tools?

• Peru

• U.S.

• neither

• not enough info

Even if a country has the absolute advantage in all goods, they can still benefit from trade.

• True

• False

Arlene has the comparative advantage over John in house painting but not in furniture polishing. Therefore,

• John must have the absolute advantage in house painting

• Arlene must have an absolute advantage in furniture polishing

• John must have a lower opportunity cost of furniture polishing

• Arlene must have an aboslute advantage in both.

Which of the following is a consequence of a protective tariff on imported steel?

• Income is transferred from steel consumers to steel producers

• Allocative efficiency is improved

• Income is transferred from domestic steel to foreign steel producers

• Aggregate supply increases

Who has the absolute advantage in Product A?

• USA

• Great Britain

• Neither

• Both