Econ 3400 quiz 1| Ques ons and answers | Updated
New
Interna onal trade is based on the idea that
resources are less mobile interna onally than are goods.
A sudden shi from import tariffs to free trade may result in short-term unemployment in
import-compe ng industries.
Trade is a zero-sum ac vity.
False
The trading principle formulated by Adam Smith maintained that
Absolute cost differences determine the immediate basis for trade.
When a na on requires fewer resources than another na on to produce a product, the na on is
said to have a compara ve advantage.
False
In a simplified two-product, two-country world, interna onal trade generally leads to increases
in output in both countries and consumer welfare in both countries.
True
If a produc on possibili es curve is bowed out (i.e., is concave to the origin), produc on occurs
under condi ons of
increasing opportunity cost.
The "trade triangle" concept is used to indicate a na on's
terms of trade, exports, and imports.
In a state of "autarky," a na on's consump on opportuni es are the same as their produc on
opportuni es.
true
If Japan and France have iden cal produc on possibili es curves and iden cal community
indifference curves, gainful specializa on and trade are not possible.
New
Interna onal trade is based on the idea that
resources are less mobile interna onally than are goods.
A sudden shi from import tariffs to free trade may result in short-term unemployment in
import-compe ng industries.
Trade is a zero-sum ac vity.
False
The trading principle formulated by Adam Smith maintained that
Absolute cost differences determine the immediate basis for trade.
When a na on requires fewer resources than another na on to produce a product, the na on is
said to have a compara ve advantage.
False
In a simplified two-product, two-country world, interna onal trade generally leads to increases
in output in both countries and consumer welfare in both countries.
True
If a produc on possibili es curve is bowed out (i.e., is concave to the origin), produc on occurs
under condi ons of
increasing opportunity cost.
The "trade triangle" concept is used to indicate a na on's
terms of trade, exports, and imports.
In a state of "autarky," a na on's consump on opportuni es are the same as their produc on
opportuni es.
true
If Japan and France have iden cal produc on possibili es curves and iden cal community
indifference curves, gainful specializa on and trade are not possible.
