Chp. 3 micro

People who provide you with goods and services are acting out of generosity. do so because they have no other choice. do so because they get something in return. are required to do so by government.

Regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes vases, but Regan is better at producing both. In this case, trade could benefit both Jayson and Regan. benefit Jayson, but not Regan. benefit Regan, but not Jayson. benefit neither Jayson nor Regan.

Consider a shoemaker and a vegetable farmer. Potentially, trade could benefit both individuals if the shoemaker can produce only shoes and the vegetable farmer can produce only vegetables. the shoemaker is capable of growing vegetables, but he is not very good at it. the vegetable farmer is better at growing vegetables and better at making shoes than the shoemaker. All of the above

Which of the following statements is not correct? Trade allows for specialization. Trade has the potential to benefit all nations. Trade allows nations to consume outside of their production possibilities curves. Absolute advantage is the driving force of specialization

If labor in Mexico is less productive than labor in the United States in all areas of production, neither nation can benefit from trade. Mexico can benefit from trade but the United States cannot. the United States will have a comparative advantage relative to Mexico in the production of all goods. both Mexico and the United States still can benefit from trade.

Absolute advantage is found by comparing different producers' opportunity costs. payments to land, labor, and capital. input requirements per unit of output. locational and logistical circumstances

The gains from trade are evident in economic models, but seldom observed in the real world. evident in the real world, but impossible to capture in economic models. a result of more efficient resource allocation than would be observed in the absence of trade. based on the principle of absolute advantage

The principle of comparative advantage as we know it today was developed by Aristotle. David Ricardo. John Maynard Keynes. Adam Smith.

Trade between countries allows each country to consume at a point outside its production possibilities frontier. limits a country's ability to produce goods and services on its own. must benefit both countries equally; otherwise, trade is not mutually beneficial. can best be understood by examining the countries' absolute advantages

A good that is produced abroad and sold domestically is called a quota. a tariff. an import. an export.

By definition, imports are people who work in foreign countries. goods in which a country has an absolute advantage. whatever is given up to obtain some item. goods produced abroad and sold domestically.

A country that currently does not trade with other countries could benefit by restricting imports and promoting exports. promoting imports and restricting exports. restricting both imports and exports. not restricting trade.

A country's consumption possibilities frontier can be outside its production possibilities frontier if the country's technology is superior to the technologies of other countries. the citizens of the country have a greater desire to consume goods and services than do the citizens of other countries. the country engages in trade. All of the above are correct.

Total output in an economy increases when each person specializes because there is less competition for the same resources. each person spends more time producing that product in which he or she has a comparative advantage. a wider variety of products will be produced within each country due to specialization. government necessarily plays a larger role in the economy due to specialization.

Economists generally support trade restrictions. government management of trade. export subsidies. free international trade