MBA 680 FINAL EXAM PREP | 156 COMPLETE
QUESTIONS WITH DETAILED SOLUTIONS |
2026 NEWEST VERSION | GET AN A+ GRADE
If country X has higher labor productivity in the production of umbrellas than the rest of
the world, we would say that country X has a(n) _____ in the production of umbrellas. -
answer-Absolute advantage
If a country exports the products it can produce at a low opportunity cost and imports
the products it would otherwise produce at a high opportunity cost, we say that such
trade is based on the - answer-Theory of comparative advantage
The table below shoes the number of labor hours required to produce one gallon of wine
and one pound of cheese in the US and France. If the US and France engage in free trade
with each other, the international price of cheese will lie between... - answer-0.25
Gallon of wine per pound; two gallons of wine per pound
The table below shows the number of labor hours required to produce one umbrella and
one bushel of corn in the UK and the rest of the world. If the UK and the rest of the world
begin to trade with each other, the international price of umbrellas will lie between... -
answer-3 bushels of corn per umbrella and 8 bushels of corn per umbrella
The UK has a comparative advantage in the production of - answer-Only corn
The figure below shoes the production-possibility curves for Canada and the rest of the
world. The opportunity cost of producing a bushel of corn in Canada and the rest of the
world are (BLANK) liters and (BLANK) liters of maple syrup respectively. - answer-9/7;
1/2
In a two-country commodity model, if a country has a comparative advantage in the
production of a certain good, it implies that this country... - answer-Can produce this
good at a lower opportunity cost than the other country.
,Vineland and Moonited Republic produce wine and cheese. The opportunity cost for the
production of a bottle of wine in Vineland is two pounds of cheese, and in the Moonited
Republic is 2.5 pounds of cheese. Based on this information, it can be concluded that -
answer-Vineland has a comparative advantage in the production of wine.
What is the opportunity cost of producing a bushel of corn in the UK? - answer-1/3 of an
umbrella
Which of the following is true of mercantilism? - answer-Mercantilism believed that
national well-being was based on national holdings of gold and silver
The international price ratio is 0.33 bushels of wheat/bale of cotton as shown by the line
RS. I1 and I2 are two of the community indifference curves of Canada. After Canada
engages in free trade, it will... - answer-Produce at point S1 and consume at point C1
I1 and I2 are community indifference curves for Canada and the rest of the world. In the
absence of trade, the rest of the world produces (BLANK) bales of cotton and (BLANK)
bushels of wheat. - answer-8;10
A country which has a higher ratio of capital to other factors of production than does the
rest of the world is - answer-Relatively capital-abundant
Which of the following best explains why increasing marginal costs of production arise?
- answer-Different commodities use inputs in different proportions
Country Y has 15 thousand acres of land and 45 thousand laborers, whereas the Rest of
the World has 100 thousand acres of land and 200 thousand laborers. These countries
produce a labor-intensive good A, and a land-intensive good B. Based on the
information given here, we can conclude that - answer-Country Y is relatively labor-
abundant
Assume further technology and tastes are the same in the US and the rest of the world.
This information indicates that the US - answer-is relatively capital-abundant
, Assume that Country X produces two goods (Sugar and shoes) - and that the possibility
curve is "bowed" out. As the country produces more sugar the opportunity cost of sugar
in terms of shoes forgone will - answer-Increase
Which of the following economists proposed an international trade model that explains
international trade patterns using factor proportions? - answer-Eli Heckscher and Bertil
Ohlin
Country Y has 15 thousand acres of land and 45 thousand laborers, whereas the Rest of
the World has 100 thousand acres of land and 200 thousand laborers. These countries
produce a labor-intensive good A, and a land-intensive good B. When trade opens up
between these countries, it can be inferred that country Y will: - answer-Export Good A
and import Good B
Suppose Country Y produces only corn and clothing using only two inputs-land and
labor. Production of corn requires an intensive use of land whereas clothing is a labor-
intensive good. If the price of corn increases by 15% and the price of clothing remains
constant, the Stopler-Samuelson theorem predicts that in the long-run. - answer-The
rental rate of land will increase by more than 15%
Let's assume that cloth-making and farming are the only two sectors of production in a
country. If this country is labor-abundant, and if trade corresponds to the Heckscher-
Ohlin theory, which of the following groups will gain in the short run, but lose in the long
run, from the opening of trade? - answer-Domestic land-owners in the domestic cloth-
making sector
If trade corresponds to the Heckscher-Ohlin theory, which of the following is most likely
to happen in the long run after a labor-abundant country engages in free trade? -
answer-The capital to labor ratio used in production in the export sector will increase
Suppose Country A, a labor-abundant country, produces only wheat and cloth. The
following equations illustrate the prices and costs of wheat and cloth in the country. The
numbers indicate the amounts of labor and land needed to produce a unit of wheat and
cloth. "W" is the wage rate and "r" is the rental rate of the land.
QUESTIONS WITH DETAILED SOLUTIONS |
2026 NEWEST VERSION | GET AN A+ GRADE
If country X has higher labor productivity in the production of umbrellas than the rest of
the world, we would say that country X has a(n) _____ in the production of umbrellas. -
answer-Absolute advantage
If a country exports the products it can produce at a low opportunity cost and imports
the products it would otherwise produce at a high opportunity cost, we say that such
trade is based on the - answer-Theory of comparative advantage
The table below shoes the number of labor hours required to produce one gallon of wine
and one pound of cheese in the US and France. If the US and France engage in free trade
with each other, the international price of cheese will lie between... - answer-0.25
Gallon of wine per pound; two gallons of wine per pound
The table below shows the number of labor hours required to produce one umbrella and
one bushel of corn in the UK and the rest of the world. If the UK and the rest of the world
begin to trade with each other, the international price of umbrellas will lie between... -
answer-3 bushels of corn per umbrella and 8 bushels of corn per umbrella
The UK has a comparative advantage in the production of - answer-Only corn
The figure below shoes the production-possibility curves for Canada and the rest of the
world. The opportunity cost of producing a bushel of corn in Canada and the rest of the
world are (BLANK) liters and (BLANK) liters of maple syrup respectively. - answer-9/7;
1/2
In a two-country commodity model, if a country has a comparative advantage in the
production of a certain good, it implies that this country... - answer-Can produce this
good at a lower opportunity cost than the other country.
,Vineland and Moonited Republic produce wine and cheese. The opportunity cost for the
production of a bottle of wine in Vineland is two pounds of cheese, and in the Moonited
Republic is 2.5 pounds of cheese. Based on this information, it can be concluded that -
answer-Vineland has a comparative advantage in the production of wine.
What is the opportunity cost of producing a bushel of corn in the UK? - answer-1/3 of an
umbrella
Which of the following is true of mercantilism? - answer-Mercantilism believed that
national well-being was based on national holdings of gold and silver
The international price ratio is 0.33 bushels of wheat/bale of cotton as shown by the line
RS. I1 and I2 are two of the community indifference curves of Canada. After Canada
engages in free trade, it will... - answer-Produce at point S1 and consume at point C1
I1 and I2 are community indifference curves for Canada and the rest of the world. In the
absence of trade, the rest of the world produces (BLANK) bales of cotton and (BLANK)
bushels of wheat. - answer-8;10
A country which has a higher ratio of capital to other factors of production than does the
rest of the world is - answer-Relatively capital-abundant
Which of the following best explains why increasing marginal costs of production arise?
- answer-Different commodities use inputs in different proportions
Country Y has 15 thousand acres of land and 45 thousand laborers, whereas the Rest of
the World has 100 thousand acres of land and 200 thousand laborers. These countries
produce a labor-intensive good A, and a land-intensive good B. Based on the
information given here, we can conclude that - answer-Country Y is relatively labor-
abundant
Assume further technology and tastes are the same in the US and the rest of the world.
This information indicates that the US - answer-is relatively capital-abundant
, Assume that Country X produces two goods (Sugar and shoes) - and that the possibility
curve is "bowed" out. As the country produces more sugar the opportunity cost of sugar
in terms of shoes forgone will - answer-Increase
Which of the following economists proposed an international trade model that explains
international trade patterns using factor proportions? - answer-Eli Heckscher and Bertil
Ohlin
Country Y has 15 thousand acres of land and 45 thousand laborers, whereas the Rest of
the World has 100 thousand acres of land and 200 thousand laborers. These countries
produce a labor-intensive good A, and a land-intensive good B. When trade opens up
between these countries, it can be inferred that country Y will: - answer-Export Good A
and import Good B
Suppose Country Y produces only corn and clothing using only two inputs-land and
labor. Production of corn requires an intensive use of land whereas clothing is a labor-
intensive good. If the price of corn increases by 15% and the price of clothing remains
constant, the Stopler-Samuelson theorem predicts that in the long-run. - answer-The
rental rate of land will increase by more than 15%
Let's assume that cloth-making and farming are the only two sectors of production in a
country. If this country is labor-abundant, and if trade corresponds to the Heckscher-
Ohlin theory, which of the following groups will gain in the short run, but lose in the long
run, from the opening of trade? - answer-Domestic land-owners in the domestic cloth-
making sector
If trade corresponds to the Heckscher-Ohlin theory, which of the following is most likely
to happen in the long run after a labor-abundant country engages in free trade? -
answer-The capital to labor ratio used in production in the export sector will increase
Suppose Country A, a labor-abundant country, produces only wheat and cloth. The
following equations illustrate the prices and costs of wheat and cloth in the country. The
numbers indicate the amounts of labor and land needed to produce a unit of wheat and
cloth. "W" is the wage rate and "r" is the rental rate of the land.
