Columbia is a country in which coffee can easily be produced. The USA is a count

Question

Columbia is a country in which coffee can easily be produced. The USA is a country where it is nearly impossible to produce coffee. Of course the USA imports coffee and Colombia exports coffee. This type of trade is characterized as ____________.

Question options:

A)

Absolute advantage

B)

Comparative advantage This answer is not correct

C)

The result of North American Free Trade Agreement

D)

None of the above

Question 2

Japan can produce 10,000 tons of steel with the same resources with which it can produce 6,000 tons of rice. The Japanese opportunity cost of a ton of rice is 1.667 tons of steel and the opportunity cost of producing steal is .6000 tons of rice.The USA can produce 8,000 tons steel and 5,000 tons of using the same resources. The opportunity American cost of producing of rice is 1.600 tons of steel and the opportunity cost of producing a ton of steel is .6250 of rice tons. Japan will tend to _______ steel and _______ rice.

Question options:

A)

Export steel, and no trade in rice

B)

Export, import

C)

Import, export This answer is not correct

D)

There will be no trade between the two countries.

Question 4

The Chevrolet is an American made car except the body is made in Canada, the tires in Brazil, the head lights from Malaysia, and the air bags from Japan. This would be a very good example of _______.

Question options:

A)

Economies of scale

B)

Absolute advantage This answer is not correct

C)

Split value chain

D)

Comparative advantage

Question 5

There are many strategy to diminish the flow of trade into a country. Which of the following is NOT considered one of these strategy.

Question options:

A)

Nontariff barriers This answer is not correct.

B)

Imposition of trade agreements

C)

Tariffs

D)

Quotas

Question 8

International trade expanded greatly in the last several decades. This expansion is due to many reasons but one of the following is NOT one.

Question options:

A)

Rounds of negotiation that lowered or eliminated tariffs on a universal basis.

B)

Agreement between individual nations to improve trade and remove barriers of trade. This answer is not correct

C)

Improved information about foreign good through the internet.

D)

International agreements that establish basic worker rights.

Question 21

What is meant by multiplier effect in terms o fiscal policy?

Question options:

A)

How a given change in expenditures cycles repeatedly through the economy, and thus has a far larger final impact than the initial change.

B)

macroeconomic model in which equilibrium output occurs where the total or aggregate expenditures in the economy are equal to the amount produced.

C)

Total increase in aggregate expenditures divided by the original increase in expenditures.

D)

The relationship between income and expenditures on consumption. This answer is not correct

Question 23

Bob foresees that, because an over all economic slow down, expects that his employer will be cutting employees. Bob is assured of his ability to weather this situation and the economy will quickly rebound. His spending is unaffected. This is an examples of _______.

Question options:

A)

Keynesian theory This answer is not correct

B)

cyclical expectations

C)

adaptive expectations

D)

rational expectations

Question 24

In the neoclassic model, economic growth over time shifts potential vertical potential GDP curve and the ______________ gradually to the right.

Question options:

A)

vertical Phillips curve

B)

upward sloping segment of the AS curve

C)

45 degree AD curve This answer is not correct

D)

vertical AD curve

Explanation / Answer

1. Because America can not produce coffee at all, Columbia has an absolute advantage in producing coffee.

OPTION A

2. Japan will export steel and import rice. The reason being, Japan's opportunity cost of producing steel (0.6000 tons of rice) is less than that of America (0.6250 tons of rice). that's why it will produce steel and export the same. And America's opportunity cost of producing rice (1.600 tons of steel) is less than that of Japan (1.667 tons of steel) and therefore America will export rice.

OPTION B

4. OPTION C Split value chain

5. Tariff OPTION C

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