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 for 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

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 for 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

a. 100 radios, 300 televisions in Radioland and 300 radios, 100 televisions in Teeveeland.
b. 300 radios, 100 televisions in Radioland and 100 radios, 300 televisions in Teeveeland.
c. 200 radios, 100 televisions in Radioland and 100 radios, 200 televisions in Teeveeland.
d. 300 radios, 100 televisions in Radioland and 100 radios, 400 televisions in Teeveeland.








Answer: B

Economists generally support

Economists generally support

a. trade restrictions.
b. government management of trade.
c. export subsidies.
d. free international trade.







Answer: D

A good that is produce abroad and sold domestically is called

A good that is produce abroad and sold domestically is called

a. a quota.
b. a tariff.
c. an import.
d. an export.







Answer: C

When a country has a comparative advantage in producing a certain good,

When a country has a comparative advantage in producing a certain good,

a. the country should import that good.
b. the country should produce just enough of that good for its own consumption.
c. the country's opportunity cost of that good is high relative to other countries' opportunity costs of that same good.
d. None of the above are correct.







Answer: D

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if

a. Canada requires fewer resources than the U.S. tor produce a bushel of wheat.
b. the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S.
c. the opportunity cost of producing a bushel of wheat is lower for the U.S. than it is for Canada.
d. the U.S. has an absolute advantage over Canada in producing computer software.








Answer: B

Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,

Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,

a. Belarus should export linen to Russia.
b. Russia should export linen to Belarus.
c. trading linen would provide no net advantage to either country.
d. Without additional information about opportunity costs, this question cannot be answered.





Answer: A