eco121

QN=17 (17720) What must be given up to obtain an item is called

• out-of-pocket cost.

• comparative worth.

• opportunity cost.

• absolute value.

QN=19 (17725) Adam Smith

• and David Ricardo both opposed free trade.

• opposed free trade, but David Ricardo supported it.

• supported free trade, but David Ricardo opposed it.

• and David Ricardo both supported free trade.

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year, and a worker in Teeveeland can produce either 2 radios or 4 televisions per year. Each nation has 100 workers. Also suppose that each country completely specializes in producing the good in which it has a comparative advantage. If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year, then each country's maximum consumption of new radios and televisions per year will be

• 100 radios, 300 televisions in Radioland and 300 radios, 100 televisions in Teeveeland.

• 300 radios, 100 televisions in Radioland and 100 radios, 300 televisions in Teeveeland.

• 200 radios, 100 televisions in Radioland and 100 radios, 200 televisions in Teeveeland.

• 300 radios, 100 televisions in Radioland and 100 radios, 400 televisions in Teeveeland

QN=24 (17742) Refer to Figure 3-9. If Uzbekistan and Azerbaijan switch from each country dividing its time equally between the production of bolts and nails to each country spending all of its time producing the good in which it has a comparative advantage, then total production will increase by

• 5 bolts and 10 nails.

• 15 bolts and 40 nails.

• 20 bolts and 50 nails.

• 30 bolts and 80 nails

QN=26 (17722) Which of the following is not correct?

• The producer who requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good.

• The producer who gives up less of other goods to produce Good X has the smaller opportunity cost of producing Good X.

• The producer who has the smaller opportunity cost of producing a good is said to have a comparative advantage in producing that good.

• The gains from specialization and trade are based not on comparative advantage but on absolute advantage.

QN=27 (17727) Which of the following is not correct?

• Economists are generally united in their support of free trade.

• The conclusions of Adam Smith and David Ricardo on the gains from trade have held up well over time.

• David Ricardo argued that Britain should not restrict imports of grain.

• Economists' opposition to trade restrictions is still based largely on the principle of absolute advantage

QN=28 (17726) Which famous economist developed the principle of comparative advantage as we know it today?

• Adam Smith

• David Ricardo

• John Maynard Keynes

• Milton Friedman

QN=29 (17747) A country that currently does not trade with other countries could benefit by

• restricting imports and promoting exports

• promoting imports and restricting exports.

• restricting both imports and exports.

• not restricting trade.

QN=31 (17744)
If the production possibilities frontier is bowed outward, then "?" could be

• 50

• 75

• 100

• 125.

QN=32 (17729) By definition, exports are

• limits placed on the quantity of goods brought into a country.

• goods in which a country has an absolute advantage.

• people who work in foreign countries.

• goods produced domestically and sold abroad.