Can35L3


  • 1
  • The figures show the production possibility frontiers of Sparta and Dexter. Without trade, Sparta produces at point a and the slope of its production possibility frontier at that point is 3 cans of dog food per 1 can of soup. Dexter produces at point b and the slope of its production possibility frontier at that point is 10 cans of dog food per 1 can of soup. The opportunity cost of a can of soup in Sparta is _______ and the opportunity cost of a can of dog food in Dexter is _______.


    can35001.gif

    3 cans of dog food; 1/10 can of soup
    1/3 can of dog food; 10 cans of soup
    1/3 can of dog food; 1/10 can of soup
    3 cans of dog food; 10 cans of dog food


  • 2
  • The figures show the production possibility frontiers of Sparta and Dexter. Without trade, Sparta produces at point a and Dexter produces at point b. Sparta has a comparative advantage in _______ and Dexter has a comparative advantage in _______.


    can35002.gif

    dog food; soup
    soup; soup
    soup; dog food
    dog food; dog food


  • 3
  • The figures show the production possibility frontiers of Sparta and Dexter. Without trade, Sparta produces at point a and Dexter produces at point b. When Sparta and Dexter trade with each other, Sparta imports _______ and Dexter imports _______.


    can35003.gif

    dog food; dog food
    soup; dog food
    soup; soup
    dog food; soup


  • 4
  • The countries of Shark and Whale both produce fish food and dog biscuits. Shark has a comparative advantage in the production of fish food. Whale will import _______ and consumption in Whale _______.

    fish food; is on its production possibility frontier
    fish food; is outside its production possibility frontier
    dog biscuits; outside its production possibility frontier
    dog biscuits; is on its production possibility frontier


  • 5
  • The figure shows the international market for candles in a far-off galaxy. There are only two countries in the galaxy. If the two countries do not trade with each other, the price of a candle is ____ in one country and ______ in the other country.

    can35004.gif

    $10; less than $3
    $3; $10
    $3; $3
    $5; $5


  • 6
  • The figure shows the international market for candles in a far-off galaxy. There are only two countries in the galaxy. With free international trade, the price of a candle ______________.

    can35005.gif

    is $10
    is $5
    is $3
    depends on each country's demand for and supply of candles


  • 7
  • The figure shows the international market for candles in a far-off galaxy. There are only two countries in the galaxy. With free trade, the balance of trade in candles in the galaxy is _________________.

    can35006.gif

    $360
    $600
    $0
    $1,200


  • 8
  • The figure shows the international market for light bulbs on a two country planet. Before a tariff of $1.50 is levied on light bulbs, 8 million light bulbs are traded each year. After the tariff is introduced, the exporting country receives _______ per light bulb and the importing country pays _______ per light bulb.

    can35007.gif

    $4.00; $2.50
    $3.00; $4.00
    $4.00; $4.00
    $2.50; $4.00


  • 9
  • The figure shows the international market for light bulbs on a two country planet. Before a tariff of $1.50 is levied on light bulbs, 8 million light bulbs are traded each year. The tariff revenue received by the importing country's government is _____________.

    can35008.gif

    $15 million
    $12 million
    $24 million
    $9 million


  • 10
  • When a quota is imposed, the gap between the import-supply price and domestic price is captured by the _______, and when a VER is imposed, the gap between the export price and domestic price is captured by the _______.

    importer; government of importing country
    exporter; importer
    exporter; government of importing country
    importer; exporter


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