Answered: Gains from trade come from A) Shifting…

Gains from trade come from A) Shifting tasks to people with low opportunity costs B) Technological innovation C) Reducing your opportunity cost D) Shifting tasks to people with absolute advantage

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter14: Modern Macroeconomics And Monetary Policy

Section: Chapter Questions

Problem 3CQ

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Question

Gains from trade come from
A) Shifting tasks to people with low opportunity costs
B) Technological innovation
C) Reducing your opportunity cost
D) Shifting tasks to people with absolute advantage

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A country's production possibilities frontier will be a straight line if Group of answer choices the economy is producing efficiently. increasing the production of one good by x units entails no opportunity cost in terms of the other good. increasing the production of one good by x units entails a constant opportunity cost in terms of the other good. the economy is engaged in trade with at least one other economy.
When two nations trade with each other, complete specialization by both nations will occur ifa) Nations have increasing opportunity costs of production.b) The opportunity cost of producing goods is constant in both nations.c) One nation is large and the other one small.d) Conditions in answers b and c have to be met
Maximum Feasible Hourly Production Rates of Either Product A or Product B Using All Available Resources Product Country X Country Y A 4 8 B 4 4 Refer to the above table. If opportunity costs are constant, then the opportunity cost of producing good B in country X is ________, and the opportunity cost of producing good B in country Y is ________. A. 1 unit of A; 0.5 unit of A B. 1 unit of B; 2 units of A C. 1 unit of A; 2 units of A D. 1 unit of A; 0.5 unit of B
Explain the importance of opportunity costs to decision-making and how opportunity costs lead to trade
Which of the assumptions of comparative advantage seem unrealistic? Fixed technology and imperfect competition in the market Unemployment in perfect competition Immobile factors of production and higher transportation costs Fixed technology and imperfect competition in the labour market Free trade and immobile factors of production
Two countries, A and B, that differ in their opportunity costs for the goods each one of them produces have decided to engage in trade. There is A. a unique trading ratio of these two goods that will benefit both countries. B. a unique trading ratio at which Country A will have gains from trade, but Country B will not. C. a range of trading ratios that lies between the opportunity costs of each good for both countries at which both countries will benefit from trade. D. a unique trading ratio at which Country B will have gains from trade, but Country A will not. E. a range of trading ratios that provides gains from trade only to Country A.
An example of gains from trade is that people sell their labor for money and spend that money on food because: Answer choices employers gain from running their businesses. people gain because they can earn money from trading. people value their time, so they sell it for money. more benefits can be had by specializing in one task and then trading for other goods and services than doing every task by oneself.
When one country can produce a product at a lower cost in terms of other goods, that country is said to have Group of answer choices a productive advantage. an unfair advantage. a comparative advantage. an absolute advantage.
An economy is said to have a comparative advantage in the production of a good if it can: produce that good with more resources than another economy. produce that good with a higher opportunity cost than another economy. produce that good outside its production possibilities curve. produce the good at a lower opportunity cost than another economy.
Refer to the information provided in Figure 1 below. Technological progress will cause a Group of answer choices movement from Point A to Point B. shift from ppf2 to ppf1. shift from ppf2 to ppf3. movement from Point B to Point A.
According to comparative advantage, trade between two countries Group of answer choices will benefit all the industries in each of the countries. guarantees that consumption levels will be equal in the two countries. maximizes the amount of inputs that are used in the production of all products. allows each of the trading countries to allocate its resources most efficiently.
Question 3 Trade makes costs Group of answer choices higher and reduces the variety of goods and services available. higher but increases the variety of goods and services available. lower but reduces the variety of goods and services available. lower and increases the variety of goods and services available.