Unit 5 Test Review

The concept of comparative advantage is most closely related to:

• Total Cost

• Marginal Cost

• Opportunity Cost

• Monetary Cost

A nation that has a comparative advantage in a Good X should:

• Produce neither goods X nor Y

• Specialize in the production of Good X and trade for Good Y

• Specialize in the production of Good Y and trade for Good X

• Produce both goods X & Y

Comparative advantage means

• That a nation can produce a good for a lower opportunity cost than another nation

• That a nation can produce a good for a higher opportunity cost than another nation

• That a nation can produce more of a good than another nation

• That a nation can produce less of a good than another nation

A nation that specializes in the production of a good for which they have a comparative advantage:

• They will be more efficient

• They will increase total output/production

• They will be able to consume beyond their own production possibilities

• All of these

Which of the following is NOT TRUE of trade barriers?

• Trade barriers limit the flow of goods, services, and resources between nations.

• Trade barriers reduce the likelihood of trade wars occurring between two nations.

• Trade barriers result in higher costs for consumers

• Trade barriers are a form of protection for a nation’s own production/industries.

Which of the following is a BENEFIT of trade barriers?

• Increased prices for consumers

• Limited access to a variety of products

• Increased quality and safety of imported products

• Reduced standard of living

Which of the following is a COST of trade barriers?

• Increased domestic employment in protected industries

• Fewer products available

• Increased quality and safety of imported products

• Increased efficiency in protected industries

Which of the following best describes the effects of trade barriers on producers and consumers?

• Trade barriers have no effect on producers and consumers

• Trade barriers have negative effects on all groups of people

• Trade barriers have positive effects on all groups of people

• When a country implements trade barriers some people benefit, and others are hurt

The chart above shows the level of international investment in GA. Based on the data in the chart, which statement correctly describes the impact of international investment in Georgia?

• Increased economic investment leads to increased job opportunities for Georgia Workers.

• Georgia’s role in the international economy is shrinking over time

• Increased international investment is bad for Georgia’s economy.

• Georgia does not participate in international economics

Multinational corporations

• Are corporations that operate within two or more nations

• Are corporations that operate within the borders of only one nation

• Do not operate within the state of Georgia

• Do not bring any economic benefits to the nations in which they operate