THOMSON • SOUTH-VVESTERN International Economics, Ifle Robert J. Carbaugh VP/Editorial Director: Sr. Production Editor: Internal Designer: Jack W. Role of absolute costs ANSWER: c POINTS: 1 Full file at anesi.info International-Economicsth-Edition-Robert-Carbaugh-Test-Bank Full file at. [PDF] International Economics (Mindtap Course List) Original E-Books By Robert Carbaugh . Book Details. Author: Robert Carbaugh. Pages: pages.
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International Economics,. 13th Edition. Robert J. Carbaugh. Vice President of Editorial, Business: Jack W. Calhoun. Vice President/Marketing: Bill Hendee. This page intentionally left blank. Robert J. Carbaugh Professor of Economics Central Washington University International Economics, 12th Edition ª , International Economics, Ifle. Robert J. Carbaugh. Sr. Production Editor: International Factor Movements and Multinational Enterprises. International .
Perfect competition prevails in all markets d. If a country's terms of trade improve, it must exchange more exports for a given amount of imports. Zipes MD. Hartman Read Calculation of Drug Dosages: The terms of trade is given by:
With international trade, what would be the maximum amount of steel that South Korea would be willing to export to Japan in exchange for each VCR? With international trade, what would be the maximum number of VCRs that Japan would be willing to export to South Korea in exchange for each ton of steel?
Application Full file at https: The earliest statement of the principle of comparative advantage is associated with: Adam Smith b. David Ricardo c. Eli Heckscher d. Knowledge If Hong Kong and Taiwan had identical labor costs but were subject to increasing costs of production: Trade would depend on differences in demand conditions b.
Trade would depend on economies of large-scale production c. Trade would depend on the use of different currencies d. If the international terms of trade settle at a level that is between each country's opportunity cost: There is no basis for gainful trade for either country b. Both countries gain from trade c. Only one country gains from trade d. International trade is based on the notion that: Different currencies are an obstacle to international trade b.
Goods are more mobile internationally than are resources Full file at https: Resources are more mobile internationally than are goods d. Comprehension Figure 2. Production Possibilities Schedule Referring to Figure 2. Refer to Figure 2. If the relative cost of steel were to rise, then the production possibilities schedule would: Become steeper b.
Become flatter c. Shift inward in a parallel manner d. If the relative cost of aluminum were to rise, then the production possibilities schedule would: When a nation achieves autarky equilibrium: Input price equals final product price b. Labor productivity equals the wage rate c. Imports equal exports d. When a nation is in autarky and maximizes its living standard, its consumption and production points are: Along the production possibilities schedule b. Above the production possibilities schedule c.
Beneath the production possibilities schedule d. If Canada experiences increasing opportunity costs, its supply schedule of steel will be: Downward-sloping b. Upward-sloping c. Horizontal d. If Canada experiences constant opportunity costs, its supply schedule of steel will be: Comprehension Full file at https: The gains from international trade increase as: A nation consumes inside of its production possibilities schedule b.
A nation consumes along its production possibilities schedule c. The international terms of trade rises above the nation's autarky price d. In a two-country, two-product world, the statement "Japan enjoys a comparative advantage over France in steel relative to bicycles" is equivalent to: France having a comparative advantage over Japan in bicycles relative to steel b. France having a comparative disadvantage against Japan in bicycles and steel c.
Japan having a comparative advantage over France in steel and bicycles d. Ricardo's theory of comparative advantage was of limited real-world validity because it was founded on the: Labor theory of value b. Capital theory of value c. Land theory of value d. Production costs would be lower in the United States than the United Kingdom if: According to Ricardo, a country will have a comparative advantage in the product in which its: Labor productivity is relatively low b. Labor productivity is relatively high c.
Labor mobility is relatively low d. The Ricardian model of comparative advantage is based on all of the following assumptions except: Only two nations and two products b. Product quality varies among nations c. Labor is the only factor of production d. The writings of G. MacDougall emphasized which of the following as an explanation of a country's competitive position? National income levels b. Relative endowments of natural resources c.
Domestic tastes and preferences d. Labor compensation and productivity levels Full file at https: The introduction of community indifference curves into our trading example focuses attention on the nation's: Income level b. Resource prices c. Tastes and preferences d. Introducing indifference curves into our trade model permits us to determine: Where a nation chooses to locate along its production possibilities curve in autarky b. The precise location of a nation's production possibilities curve c.
Whether absolute cost or comparative cost conditions exist d. In the absence of trade, a nation is in equilibrium where a community indifference curve: Lies above its production possibilities curve b. Is tangent to its production possibilities curve c. Intersects its production possibilities curve d.
Analysis Full file at https: The use of indifference curves helps us determine the point: Along the terms-of-trade line a country will choose b. Where a country maximizes its resource productivity c. At which a country ceases to become competitive d. With trade, a country will maximize its satisfaction when it: Moves to the highest possible indifference curve b. Forces the marginal rate of substitution to its lowest possible value c.
Consumes more of both goods than it does in autarky d. Trade between two nations would not be possible if they have: Identical community indifference curves but different production possibilities curves b. Identical production possibilities curves but different community indifference curves c. Different production possibilities curves and different community indifference curves d.
Given a two-country and two-product world, the United States would enjoy all the attainable gains from free trade with Canada if it: Trades at the U. Trades at the Canadian rate of transformation c. Specializes completely in the production of both goods d. John Stuart Mill's theory of reciprocal demand best applies when trading partners: Are of equal size and importance in the market b.
Produce under increasing cost conditions c. Partially specialize in the production of commodities d. The equilibrium prices and quantities established after trade are fully determinate if we know: The location of all countries' indifference curves b.
The shape of each country's production possibilities curve c. The comparative costs of each trading partner d. Other things being equal, the nation with the more intense demand for the other nation's exported good will gain less from trade than the nation with the less intense demand. Alfred Marshall with offer curve analysis b. John Stuart Mill with the theory of reciprocal demand c. Adam Smith with the theory of absolute advantage d. Which of the following terms-of-trade concepts is calculated by dividing the change in a country's export price index by the change in its import price index between two points in time, multiplied by to express the terms of trade in percentages?
Commodity terms of trade b. Marginal rate of transformation c. Marginal rate of substitution d. The best explanation of the gains from trade that David Ricardo could provide was to describe only the outer limits within which the equilibrium terms of trade would fall. This is because Ricardo's theory did not recognize how market prices are influenced by: Demand conditions b.
Supply conditions c. Business expectations d. Under free trade, Sweden enjoys all of the gains from trade with Holland if Sweden: Trades at Holland's rate of transformation Full file at https: Trades at Sweden's rate of transformation c.
Specializes completely in the production of its export good d.
Because the Ricardian trade theory recognized only how supply conditions influence international prices, it could determine: The equilibrium terms of trade b. The outer limits for the terms of trade c. Where a country chooses to locate along its production possibilities curve d.
The terms of trade is given by the prices: Paid for all goods imported by the home country b. Received for all goods exported by the home country c.
Received for exports and paid for imports d. Comprehension Table 2. Mexico and Denmark b.
Sweden and Denmark c. Sweden and Spain d. Spain and Mexico b. Mexico and France c. France and Denmark d. Spain b. Sweden c. France d. Given free trade, small nations tend to benefit the most from trade since they: Are more productive than their large trading partners Full file at https: Are less productive than their large trading partners c.
Have demand preferences and income levels lower than their large trading partners d. A terms-of-trade index that equals indicates that compared to the base year: It requires a greater output of domestic goods to obtain the same amount of foreign goods b. It requires a lesser amount of domestic goods to obtain the same amount of foreign goods c.
A term-of-trade index that equals 90 indicates that compared to the base year: The theory of reciprocal demand does not well apply when one country: Produces under constant cost conditions b.
Produces along its production possibilities curve c. Is of minor economic importance in the world marketplace d. The terms of trade is given by: If Japan and France have identical production possibilities curves and identical community indifference curves: Japan will enjoy all the gains from trade b.
France will enjoy all the gains from trade c. Japan and France share equally in the gains from trade d.
A rise in the price of imports or a fall in the price of exports will: Improve the terms of trade b. Worsen the terms of trade c. Expand the production possibilities curve d. A fall in the price of imports or a rise in the price of exports will: Under free trade, Canada would not enjoy any gains from trade with Sweden if Canada: Trades at the Canadian rate of transformation b. The figure assumes that Canada attains international trade equilibrium at point C.
Figure 2. Canadian Trade Possibilities Full file at https: Consider Figure 2. In the absence of trade, Canada would produce and consume: Reading and interpreting g - DISC: Televisions b. Refrigerators c. Televisions and refrigerators d. With specialization, Canada produces: With trade, Canada consumes: According to Figure 2. Challenging Full file at https: Concerning possible determinants of international trade, which are sources of comparative advantage?
Differences in: Methods of production b. Tastes and preferences c. Technological know-how d. Ricardo's model of comparative advantage assumed all of the following except: In each nation, labor is the only input b. Costs do not vary with the level of production c. Perfect competition prevails in all markets d. Trade is balanced, thus ruling out flows of money between nations b. Firms make production decisions in an attempt to maximize profits c.
Free trade occurs between nations d. The dynamic gains from trade include all of the following except: Economies of large-scale production resulting in decreasing unit cost b. Increased saving and investment resulting in economic growth c.
Increased competition resulting in lower prices and wider range of output d. All of the following may be exit barriers except a. Employee health benefit costs b. Treatment, storage and disposal costs c. Penalties for terminating contracts with raw material suppliers d. Incomplete specialization may be caused by a. Increasing opportunity cost b. Unrestricted trade c. Constant opportunity cost d. Improvements in productivity may lead to decreasing comparative costs if a.
The assumption of fixed technologies under constant costs is relaxed Full file at https: Technologies available to each nation is allowed to differ c. Resource endowments are allowed to vary d. Adam Smith a. Was a leading advocate of free trade b.
Developed the concept of absolute advantage c. Maintained that labor costs represent the major determinant of production cost d. Modern trade theory contends that the pattern of world trade is governed by a. Differences in supply conditions and demand conditions b. Supply conditions only c. Demand conditions only d.
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