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Download Macroeconomics 7th Edition Hubbard Test Bank all chapters
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Macroeconomics 2019, 7e (Hubbard/O'Brien)
Chapter 7 Comparative Advantage and the Gains from International Trade
2) When a tariff is placed on running shoes, the ________ to local businesses and local
consumers are likely to be greater in dollar terms than the ________ to the owner of a shoe
factory and its workers.
A) gains; gains
B) gains; losses
C) losses; gains
D) losses; losses
Answer: C
Diff: 1 Page Ref: 289/217
Topic: Trade Restrictions
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Analytical thinking
Special Feature: Economics in Your Life & Career: Should a Member of Congress Support a
Tariff on Running Shoes?
1
Copyright © 2019 Pearson Education, Inc.
3) Since 1999, ________ U.S. manufacturing jobs may have been lost to Chinese imports, and
trade with China has ________ throughout the United States.
A) more than 2 million; created other jobs
B) more than 2 million; not created any additional jobs
C) very few; created more than 2 million jobs
D) very few; not created any additional jobs
Answer: A
Diff: 1 Page Ref: 288/216
Topic: Trade Restrictions
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Analytical thinking
Special Feature: Chapter Opener: President Trump, Oreo Cookies, and Free Trade
4) Over the past several decades there has been rapid growth in international trade. This growth
has been due to all but one of the following factors. Which factor has not contributed to the
growth of international trade?
A) the spread of reliable communications
B) an increase in the tariffs charged on many goods
C) a reduction in shipping costs
D) favorable changes in government policies
Answer: B
Diff: 1 Page Ref: 290/218
Topic: Trade
*: Recurring
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Analytical thinking
2
Copyright © 2019 Pearson Education, Inc.
6) Imports are goods and services bought domestically
A) and produced domestically.
B) but produced in other countries.
C) and resold at a profit.
D) and not subject to tariffs.
Answer: B
Diff: 1 Page Ref: 290/218
Topic: Imports
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
7) Domestically produced goods and services sold to other countries are referred to as
A) exports.
B) imports.
C) transfer payments.
D) capital outflow.
Answer: A
Diff: 1 Page Ref: 291/219
Topic: Exports
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
8) When Sophie, a French citizen, purchases a Dell computer in Paris, France that was produced
in Texas, the purchase is
A) both a U.S. and a French import.
B) a U.S. import and a French export.
C) a U.S. export and a French import.
D) neither an export nor an import for either country.
Answer: C
Diff: 1 Page Ref: 290-291/218-219
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
3
Copyright © 2019 Pearson Education, Inc.
9) When Tesla, a U.S. company, purchases Italian-made Pirelli tires for its automobiles, the
purchase is
A) both a U.S. and an Italian import.
B) a U.S. import and an Italian export.
C) a U.S. export and an Italian import.
D) neither an export nor an import for either country.
Answer: B
Diff: 1 Page Ref: 290-291/218-219
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
10) Which of the following statements about the importance of trade to the U.S. economy is
false?
A) Since 1970, both exports and imports have steadily increased as a fraction of U.S. gross
domestic product.
B) Overall, about 20 percent of U.S. manufacturing jobs depend directly or indirectly on exports.
C) The United States is the second largest exporter in the world.
D) The U.S. economy is highly dependent on international trade for growth in its gross domestic
product.
Answer: D
Diff: 1 Page Ref: 291-292/219-220
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
11) Which of the following countries is not one of the top three exporting countries in the world?
A) China
B) Germany
C) South Korea
D) the United States
Answer: C
Diff: 1 Page Ref: 292/220
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
4
Copyright © 2019 Pearson Education, Inc.
12) Which of the following statements is false?
A) Japan is less dependent on foreign trade than is the United States.
B) Imports and exports account for over one-half of the GDP of the Netherlands.
C) China is the leading exporting country, accounting for 12.1 percent of total world exports.
D) Because the cost of labor used on farms is so high, the United States exports very little of its
wheat, rice, and corn crops.
Answer: D
Diff: 1 Page Ref: 291-292/219-220
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
13) As a percentage of GDP, imports are greater than exports for which of the following
countries?
A) Germany
B) Italy
C) the Netherlands
D) the United States
Answer: D
Diff: 1 Page Ref: 292/220
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
14) Twenty-eight countries in Europe have formed the European Union (EU). After the EU was
formed it
A) eliminated all tariffs among its member countries.
B) completed a trade treaty (NAFTA) that reduced tariff rates between the EU and North
American countries.
C) greatly decreased imports and exports among its member countries.
D) barred imports of 747 jumbo jets by its member countries; all EU countries must now buy jets
from Airbus, a European company.
Answer: A
Diff: 1 Page Ref: 291/219
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
5
Copyright © 2019 Pearson Education, Inc.
15) The 1994 agreement that eliminated most tariffs among the United States, Canada, and
Mexico is known as
A) the Pacific Trade Association.
B) Trade Without Borders.
C) NAFTA.
D) the Western Trade Union.
Answer: C
Diff: 1 Page Ref: 290/218
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
16) In the 1930s the United States charged an average tariff rate
A) that was less than its average tariff rate in 2007.
B) that cut its exports to other countries by 50 percent.
C) that was less than 2 percent.
D) that exceeded 50 percent.
Answer: D
Diff: 1 Page Ref: 290/218
Topic: Tariffs
*: Recurring
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Analytical thinking
6
Copyright © 2019 Pearson Education, Inc.
18) Although the United States is the second largest exporting country, international trade is less
important to the United States than it is to most other countries.
Answer: TRUE
Diff: 1 Page Ref: 292/220
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
19) Imports are goods and services bought domestically but produced in other countries.
Answer: TRUE
Diff: 1 Page Ref: 290/218
Topic: Imports
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
21) Today, the United States charges an average tariff rate of less than 1.5 percent.
Answer: TRUE
Diff: 1 Page Ref: 290/218
Topic: Tariffs
*: Recurring
Learning Outcome: Micro-5: List ways in which governments intervene in markets and explain
the consequences of such intervention
AACSB: Analytical thinking
22) Is the value of U.S. exports typically larger or smaller than the value of U.S. imports?
Answer: As a percentage of GDP, U.S. imports have been larger than U.S. exports since the
mid-1970s.
Diff: 1 Page Ref: 291/219
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
7
Copyright © 2019 Pearson Education, Inc.
23) What are three primary reasons for the growth of international trade over the past 50 years?
Answer: The increase in trade is the result of the falling costs of shipping products around the
world, the spread of inexpensive and reliable communications, and changes in government
policies.
Diff: 1 Page Ref: 290-291/218-219
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
24) Explain why international trade is less important to the United States than it is to many other
countries.
Answer: In the United States, international trade (imports and exports) makes up a lower
percentage of GDP than in many other countries. As a percentage of GDP, U.S. imports and
exports each make up less than 20 percent of U.S. GDP, whereas in some countries, such as
Belgium and the Netherlands, imports and exports make up over half of GDP, and in larger
European nations such as France, Italy, Germany, and the United Kingdom, imports and exports
make up between 25 and 50 percent of GDP.
Diff: 2 Page Ref: 290-291/218-219
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
1) ________ is the ability to produce more of a good or service than competitors when using the
same amount of resources.
A) Absolute advantage
B) Comparative advantage
C) Trade superiority
D) Trade autarky
Answer: A
Diff: 1 Page Ref: 293/221
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
8
Copyright © 2019 Pearson Education, Inc.
2) Trade that is within a country or between countries is based on the principle of
A) absolute advantage.
B) scarcity.
C) competition.
D) comparative advantage.
Answer: D
Diff: 1 Page Ref: 293/221
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
Table 7-1
Berries Fish
Rob 20 80
Bill 30 60
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to
find and prepare their own food. Rob and Bill spent one day each fishing and picking berries.
The table lists the pounds of output Rob and Bill produced.
3) Refer to Table 7-1. Use the table above to select the statement that accurately interprets the
data in the table.
A) Rob has an absolute advantage in picking berries and Bill has an absolute advantage in
catching fish.
B) Bill has an absolute advantage in picking berries and Rob has an absolute advantage in
catching fish.
C) Bill has an absolute advantage in picking berries and catching fish.
D) Rob has an absolute advantage in picking berries and catching fish.
Answer: B
Diff: 2 Page Ref: 293-294/221-222
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
9
Copyright © 2019 Pearson Education, Inc.
4) Refer to Table 7-1. Use the table above to select the statement that accurately interprets the
data in the table.
A) Bill has a greater opportunity cost than Rob for picking berries.
B) Bill's opportunity cost for catching fish is less than Rob's.
C) Rob has a greater opportunity cost than Bill for picking berries.
D) Bill's opportunity cost for picking berries and catching fish are both greater than Rob's.
Answer: C
Diff: 3 Page Ref: 293-294/221-222
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
5) Refer to Table 7-1. Use the table above to select the statement that accurately interprets the
data in the table.
A) Bill has a comparative advantage in catching fish.
B) Rob has a comparative advantage in picking berries.
C) Rob has a comparative advantage in catching fish and picking berries.
D) Bill has a comparative advantage in picking berries.
Answer: D
Diff: 3 Page Ref: 293-294/221-222
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
6) Refer to Table 7-1. Use the table above to select the statement that accurately interprets the
data in the table.
A) Rob has a comparative advantage in catching fish.
B) Bill has an absolute advantage in catching fish.
C) Bill has a comparative advantage in catching fish.
D) Rob has a comparative advantage in picking berries and catching fish.
Answer: A
Diff: 3 Page Ref: 293-294/221-222
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
10
Copyright © 2019 Pearson Education, Inc.
Table 7-2
Empanadas Tacos
Madison 30 50
Austin 24 32
Madison and Austin own Cafe Ole'. Table 7-2 lists the number of empanadas and tacos Madison
and Austin can each make in one hour.
7) Refer to Table 7-2. Select the statement that accurately interprets the data in the table.
A) Madison has an absolute advantage in making tacos and Austin has an absolute advantage in
making empanadas.
B) Madison has an absolute advantage in making empanadas and Austin has an absolute
advantage in making tacos.
C) Madison has an absolute advantage in making empanadas and tacos.
D) Austin has an absolute advantage in making empanadas and tacos.
Answer: C
Diff: 2 Page Ref: 293-294/221-222
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
8) Refer to Table 7-2. Select the statement that accurately interprets the data in the table.
A) Madison has a greater opportunity cost than Austin for making tacos.
B) Madison's opportunity cost for making tacos is less than Austin's.
C) Austin has a greater opportunity cost than Madison for making empanadas.
D) Austin's opportunity cost for making tacos and making empanadas are both greater than
Madison's.
Answer: B
Diff: 3 Page Ref: 293-294/221-222
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
11
Copyright © 2019 Pearson Education, Inc.
9) Refer to Table 7-2. Select the statement that accurately interprets the data in the table.
A) Madison has a comparative advantage in making empanadas.
B) Austin has a comparative advantage in making tacos.
C) Madison has a comparative advantage in making empanadas and making tacos.
D) Madison has a comparative advantage in making tacos.
Answer: D
Diff: 3 Page Ref: 293-294/221-222
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
10) Refer to Table 7-2. Select the statement that accurately interprets the data in the table.
A) Madison has a comparative advantage in making empanadas.
B) Austin has an absolute advantage in making tacos.
C) Austin has a comparative advantage in making empanadas.
D) Austin has a comparative advantage in making empanadas and making tacos.
Answer: C
Diff: 3 Page Ref: 293-294/221-222
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
12
Copyright © 2019 Pearson Education, Inc.
Table 7-3
Mateo and Celeste produce custom saddles and spurs. Table 7-3 lists the number of saddles and
pairs of spurs Mateo and Celeste can each produce in one month.
11) Refer to Table 7-3. Select the statement that accurately interprets the data in the table.
A) Mateo has an absolute advantage in making saddles and Celeste has an absolute advantage in
making spurs.
B) Mateo has an absolute advantage in making spurs and Celeste has an absolute advantage in
making saddles.
C) Mateo has an absolute advantage in making spurs.
D) Celeste has an absolute advantage in making saddles.
Answer: D
Diff: 2 Page Ref: 293-294/221-222
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
12) Refer to Table 7-3. Select the statement that accurately interprets the data in the table.
A) Mateo has an absolute advantage in making saddles and spurs.
B) Celeste has an absolute advantage in making saddles and spurs.
C) Neither Mateo nor Celeste has an absolute advantage in making saddles.
D) Neither Mateo nor Celeste has an absolute advantage in making spurs.
Answer: D
Diff: 2 Page Ref: 293-294/221-222
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
13
Copyright © 2019 Pearson Education, Inc.
13) Refer to Table 7-3. Select the statement that accurately interprets the data in the table.
A) Mateo has a greater opportunity cost than Celeste for making saddles.
B) Mateo's opportunity cost for making saddles is less than Celeste's.
C) Celeste has a greater opportunity cost than Mateo for making saddles.
D) Mateo's opportunity cost for making saddles and making spurs are both greater than Celeste's.
Answer: A
Diff: 3 Page Ref: 293-294/221-222
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
14) Refer to Table 7-3. Select the statement that accurately interprets the data in the table.
A) Celeste has a comparative advantage in making spurs.
B) Mateo has a comparative advantage in making spurs.
C) Celeste has a comparative advantage in making saddles and making spurs.
D) Neither Mateo nor Celeste has a comparative advantage in making spurs.
Answer: B
Diff: 3 Page Ref: 293-294/221-222
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
15) Refer to Table 7-3. Select the statement that accurately interprets the data in the table.
A) Celeste has a comparative advantage in making saddles.
B) Mateo has an absolute advantage in making spurs.
C) Mateo has a comparative advantage in making saddles.
D) Mateo has a comparative advantage in making saddles and making spurs.
Answer: A
Diff: 3 Page Ref: 293-294/221-222
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
14
Copyright © 2019 Pearson Education, Inc.
16) An economic principle that explains why people pursue different occupations is
A) absolute advantage.
B) international trade.
C) comparative advantage.
D) NAFTA.
Answer: C
Diff: 1 Page Ref: 293/221
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
17) Assume that Honduras has a comparative advantage in producing bananas and exports
bananas to Brazil. We can conclude that
A) Honduras also has an absolute advantage in producing bananas relative to Brazil.
B) Honduras has a lower opportunity cost of producing bananas relative to Brazil.
C) Brazil has an absolute disadvantage in producing bananas relative to Honduras.
D) Labor costs are higher for banana producers in Brazil than in Honduras.
Answer: B
Diff: 2 Page Ref: 293/221
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
18) Assume that Australia has a comparative advantage in producing surfboards and New
Zealand imports surfboards from Australia. We can conclude that
A) Australia also has an absolute advantage in producing surfboards relative to New Zealand.
B) Australia has a lower opportunity cost of producing surfboards relative to New Zealand.
C) New Zealand has an absolute disadvantage in producing surfboards relative to Australia.
D) Labor costs are higher for surfboard producers in New Zealand than in Australia.
Answer: B
Diff: 2 Page Ref: 293/221
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
15
Copyright © 2019 Pearson Education, Inc.
19) Whenever a buyer and a seller agree to trade, both must believe they will be made better off
A) unless the buyer resides in a different country than the seller. International trade may make
the buyer or seller worse off.
B) unless one party is richer than the other.
C) only if the buyer and seller live in countries with market economies.
D) whether the buyer and seller live in the same (or different) city or country.
Answer: D
Diff: 1 Page Ref: 293/221
Topic: Trade
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
20) If Norwegian workers are more productive than Albanian workers, then trade between
Norway and Albania
A) cannot take place because Norwegian goods and services will be less expensive than
Albanian goods and services.
B) will take place so long as each country has a comparative advantage in a good or service that
buyers in the other country want.
C) cannot take place until Albanian workers become more productive.
D) can take place only if Albania has an absolute advantage in producing a good or service
Norwegian buyers want.
Answer: B
Diff: 1 Page Ref: 293/221
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
21) If the ________ cost of production for two goods is different between two countries then
mutually beneficial trade is possible.
A) marginal
B) explicit
C) opportunity
D) implicit
Answer: C
Diff: 1 Page Ref: 293/221
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
16
Copyright © 2019 Pearson Education, Inc.
22) If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then
A) the average cost of production for sugar cane is lower in Brazil than in Cuba.
B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba.
C) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba.
D) the explicit cost of production for sugar cane is lower in Brazil than in Cuba.
Answer: C
Diff: 1 Page Ref: 293/221
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
23) If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of
the following would explain this pattern of trade?
A) Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark
has a comparative advantage in producing butter.
B) The opportunity cost of producing butter in Denmark is higher than the opportunity cost of
producing butter in Sweden.
C) Sweden must have an absolute advantage in producing cell phones and Denmark must have
an absolute advantage in producing butter.
D) Sweden has a higher opportunity cost of producing cell phones than Denmark, and Denmark
has a higher opportunity cost of producing butter.
Answer: A
Diff: 2 Page Ref: 293/221
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
24) The ability of a firm or country to produce a good or service at a lower opportunity cost than
other producers is called comparative advantage.
Answer: TRUE
Diff: 2 Page Ref: 293/221
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
17
Copyright © 2019 Pearson Education, Inc.
25) Assume that Finland and Latvia produce only two goods. If Finland has an absolute
advantage in the production of these two goods compared to Latvia, Finland can still benefit
from trade with Latvia.
Answer: TRUE
Diff: 1 Page Ref: 293/221
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
26) If a country has a comparative advantage in producing a product, it must also have an
absolute advantage in producing that product.
Answer: FALSE
Diff: 1 Page Ref: 293/221
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
27) If a country has an absolute advantage in producing a product, it may not have a comparative
advantage in producing that product.
Answer: TRUE
Diff: 1 Page Ref: 293/221
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
28) What does it mean for a country to have a comparative advantage in producing a product?
Answer: A country has a comparative advantage in producing a product when it has the ability
to produce that product at a lower opportunity cost than competitors.
Diff: 2 Page Ref: 293/221
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
18
Copyright © 2019 Pearson Education, Inc.
29) Explain whether it is possible for a country to have a comparative advantage in the
production of a product without having an absolute advantage in the production of that product.
Answer: A country can have a comparative advantage without having an absolute advantage in
the production of a product because having a comparative advantage means that the country can
produce the product at a lower opportunity cost than another country, and having an absolute
advantage means a country can produce more of the product than another country while using
the same amount of resources. Having an absolute advantage is not required to have a
comparative advantage.
Diff: 2 Page Ref: 293/221
Topic: Comparative Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
Table 7-4
Table 7-4 shows the output per hour of work for light bulbs and flash drives in Mexico and in
Canada.
30) Refer to Table 7-4. Fill in the following table with the opportunity costs of producing light
bulbs and flash drives for Mexico and Canada.
Answer:
Light Bulbs Flash Drives
Mexico 0.25 4
Canada 4 0.25
Diff: 1 Page Ref: 293-294/221-222
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
19
Copyright © 2019 Pearson Education, Inc.
31) Refer to Table 7-4.
a. Which country has an absolute advantage in the production of both light bulbs and flash
drives?
b. Which country has a comparative advantage in the production of light bulbs?
c. Which country has a comparative advantage in the production of flash drives?
Answer:
a. Neither country has an absolute advantage in the production of both products.
b. Mexico has a comparative advantage in the production of light bulbs.
c. Canada has a comparative advantage in the production of flash drives.
Diff: 1 Page Ref: 293-294/221-222
Topic: Absolute Advantage
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
Table 7-5
Pens Pencils
Tran 40 160
Farah 50 150
Table 7-5 shows the output per week for pens and pencils by Tran and Farah.
32) Refer to Table 7-5. Fill in the following table with the opportunity costs of producing bows
and arrows for Tran and Farah.
Pens Pencils
Tran
Farah
Answer:
Pens Pencils
Tran 4 0.25
Farah 3 0.33
Diff: 2 Page Ref: 293-294/221-222
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that can be
made from trade
AACSB: Analytical thinking
20
Copyright © 2019 Pearson Education, Inc.
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any value owe it to the alcohol which they contain. Elastic
constriction will reduce the amount of exudate and assist in the
absorption of that already present. It is a measure, however, to be
used with great caution lest venous return be interfered with and
edema or gangrene be the consequence. A joint tensely distended
with fluid as a result of combined contusion and laceration, called a
sprain, may be emptied by aspiration, but this should be used only
under antiseptic precautions. Finally any collection of blood which
fails to disappear may be incised and cleaned, its cavity mopped out
with compresses, and its surface made to come in contact by
pressure. In hematomas and large extravasations of blood,
sometimes in joints, but rarely in the pleural or peritoneal cavities,
this method may also be used.
LACERATED WOUNDS.
Lacerated wounds differ from contused in the character of the
tears in the tissues affected and in the exposure to infection by
contact. They vary in extent and severity. Not infrequently tissues or
organs of the greatest importance are lacerated, e. g., the globe of
the eye, the liver, the intestines. The term laceration itself implies
such open injury that part of it may be exposed to infection. The first
danger is from hemorrhage. This may subside spontaneously, or
may have been checked by some first aid, or may prove nearly fatal
by the time the patient is seen by the surgeon. The first measure will
be hemostasis by the readiest and most effective measures at hand.
This may mean the application of compresses or of a tourniquet, or
even of manual pressure, until surgical procedures can be instituted.
Shock should be treated by lowering the head and raising the
extremities, or bandaging the latter, and the subcutaneous
administration of morphine or atropine. Emergency treatment of
these cases should include removal of foreign bodies, and such
cleanliness and attention to antisepsis as may be possible at the
time. Support of the injured part should be effected temporarily until
dressings can be scientifically applied. If cane sugar will keep fruit
and meat from decomposition it will have the same effect in human
tissues, and a laceration with or without compound fracture of bone
may be filled with granulated sugar until a suitable dressing can be
applied.
The surgical treatment of laceration should include the following
measures: Hemostasis; the removal of foreign bodies, as well as of
tissue which is so injured as to make repair impossible or even
questionable; a careful study of nerve supply, in order to be sure that
no nerve suture should be made; a similar study of muscles and
tendons, in order that tendon suture may be promptly made; careful
antisepsis throughout, asepsis being impossible; closure of the
wound by buried and superficial sutures, and such drainage tubes or
outlets as may permit free escape of whatever products of
inflammation or disintegration may result. There should also be
provision for physiological rest of the injured parts as well as of the
patient’s mind and body.
When large areas of skin or deep tissues are destroyed or torn
away, as in scalp wounds, avulsion of limbs or parts of limbs, it may
be necessary to retain that which can be saved and to remove that
which would slough if left to itself, thereby providing for flaps of skin
by which the wound may subsequently be covered, or leaving them
in case removal of a part must be made.
Everything which has vitality should be spared; on the other hand,
that which has lost its vitality should be removed at once. Thus
amputations may be sometimes called for because of extensive
lacerations with destruction of vascular and nerve supply, even
though the bones be uninjured.
In cases where the question of viability of tissues cannot be
promptly decided it is best to keep the injured part immersed in water
as warm as can be borne. In hospitals the entire body may be kept
immersed for days. By the use of warm water parts which have been
seriously injured may be restored. Ulcerations which are seen after
the sloughing process has begun can be best treated by immersion
or by the application of brewers’ yeast upon compresses or cotton.
No other substance, perhaps, will so quickly clear up an indolent or
foul surface as this; it hastens the time of separation of all that is
dead or dying and restores healthful activity to the surrounding
tissues.
Extensive lacerations leave frequent opportunity for operations by
which function may be restored or improvement affected.
PUNCTURED WOUNDS.
The essential features of punctured wounds are sufficiently
indicated by the descriptive name; but harm may be done through a
small external opening. An important subvariety of punctured
wounds is inflicted by gunshot missiles, which will receive
consideration by themselves. Injury to important vessels may lead to
serious hemorrhage; while injuries to nerve trunks may be followed
by paralysis of sensation and motion, or, as in the case of a
sympathetic trunk, by the well-known consequences of division of
vasomotor nerves, e. g., in the neck. When the punctured wound
bleeds freely and externally it may be assumed that some large
vessel has been injured. When it bleeds into one of the cavities of
the body delay in recognition may occur. This is true of a puncture of
the skull by which the middle meningeal artery or one of the sinuses
is wounded, when the symptoms of brain pressure may tardily or
rapidly appear. In the chest the intercostal or internal mammary
artery may be so injured as to bleed into the pleural cavity and cause
death. A puncture of the heart frequently leads to fatal hemorrhage
into the pericardial cavity, and in the abdomen puncture of the
various viscera has led to consequences beyond help save when
prompt relief could be afforded.
The dangers attending punctures pertain to the introduction of
infectious material which may produce sepsis or may slowly produce
tetanus. No ordinary weapon or tool is clean in a surgical sense,
while a rusty nail is even less so. It will be seen, therefore, that the
danger inherent in such a case is not to be measured by either the
size or the depth of the wound.
In dealing with these cases the first attention is to be given to
hemorrhage. Obviously punctures in certain regions are much more
likely to be followed by hemorrhage, and any puncture in the vicinity
of one of the large vessels should be managed with caution,
especially if the surgeon ascertain that it had bled profusely when
first inflicted. Such a puncture, when seen a few hours later, may
have become occluded by clot, or a considerable hematoma may
have formed beneath the skin. It is safe to presume that there is
more danger of septic infection than can accrue from later attention,
and it would be advisable in such cases to anesthetize the patient
and lay open the parts freely under full aseptic precautions, in order
that the clot be turned out and any bleeding vessel secured. A brief
study of such a case will decide the question of injury to the principal
nerve trunks. A principal nerve which has been injured or divided
should be carefully sought for and its ends freshened and sutured.
This is true also of any tendon whose function is evidently lost. If the
thorax have been punctured and the physical signs indicate the
presence of fluid, i. e., blood in the pleural cavity, it should be incised
and the blood withdrawn. This method should also be applied to
punctures of the heart. These measures will be more completely
dealt with in treating of the surgery of the chest and its contents.
Punctured wounds of the abdomen may give rise to great anxiety.
If none of the viscera have been injured they may be let alone, but if
doubt exists as to the safety or injury of any of them the abdomen
should be opened. (See Surgery of the Abdomen.)
Treatment.—For emergency purposes antiseptic occlusion is the
best procedure, and all punctures inflicted by ragged
and infectious materials, as rusty nails, should be treated by free
incision, with thorough cleansing and packing with antiseptic
material, that the wounds may heal by granulation.
INCISED WOUNDS.
Incised wounds are those inflicted by a sharp object which divides
the tissues abruptly and with a minimum amount of disruption. They
invariably bleed, sometimes seriously, even to a fatal degree, the
hemorrhage in such cases being due to severance of large vascular
trunks. Like contused wounds they vary as infinitely in extent as in
locality. According to their locality and dimensions important
structures may be severed, e. g., the trachea, the large nerve trunks
of the body, the tendons, etc., while visceral and joint cavities may
be more or less widely opened. When death occurs soon after injury
it is generally from hemorrhage. They are attended by the same
dangers of septic infection as are punctures, especially when there is
neglect in the emergency dressing. Should the pleural cavity be
opened there may be collapse of the lung.
Hemostasis is the paramount indication in all incised wounds
which bleed seriously. Hemorrhage is to be controlled temporarily by
any expedient, later by ligation or suture, or both. The remarks
above in relation to possible injury to vessels and nerves are of
equal force in this consideration. Every divided nerve trunk, as well
as every severed tendon, should be reunited by suture. If a joint
have been opened it should be cleansed and drained, even though
the incision be closed. Should there be injury to any of the viscera,
the wound may be enlarged in order that exploration may be made
and suitable remedies applied. This is true of every punctured or
incised wound. No hesitation need be felt about enlarging it so as to
permit of investigation. Hemorrhage having been checked and all
required attention having been given, the closure of an incised
wound may be made partial or complete according to its condition. If
fresh and clean it may be almost completely reunited, using deep
and buried sutures in order to bring into contact its deeper portions,
while superficial sutures will suffice for the skin. Drainage may be by
tubes or gauze or by loose suturing of the surface; but no incised
wound whose surfaces have become contaminated should be
completely closed by primary suture until all such surfaces have
been freely cut away and appear healthy and uninfected. An old
infected and gaping incised wound may be cleaned by the
application of brewers’ yeast, and when granulating it may be closed
secondarily with sutures, by which granulating surfaces are brought
into close contact.
Of wounds in general it may be said that there are mixed types as
well as illustrative examples. Thus a wound made by a hatchet or
axe may partake of the nature of contusion and of incision. In
instances where personal violence has been applied multiple
wounds of varied character may complicate the case. The
statements made above pertain to their conventional and common
characteristics. Treatment which would be proper in one case may
be impossible in another. There is always room for discretion and
good judgment, though there are fundamental rules which apply to
all cases, and include exact hemostasis, surgical cleanliness, repair
of severed nerves and tendons, removal of foreign bodies and
involved tissue, and the enforcement of physiological rest.
REPAIR OF WOUNDS.
The process of repair is essentially the same, being modified only
by the needs of the wound and the tissues involved, and by their
environment. Whether soft tissues or bones are being repaired the
differences are apparent rather than real, as bony tissue is
temporarily decalcified, and then, as soon as the process permits, is
once more stiffened by deposition of calcium salts.
The process of repair should be begun immediately after the
cessation of the disturbance which has produced the wound, and as
soon as the bleeding is checked. It may be materially influenced and
retarded by the presence of bacteria or other foreign bodies, but its
character remains unchanged. Healing has been described as
occurring by primary union, or by “the first intention,” and by
granulation, or the “second intention.”
Wounds which have been permitted to remain clean, with their
edges brought together so that the surfaces are in contact, are
healed with a minimum of waste of reparative material, the process
being as follows: The small vessels are occluded with thrombi up to
the first collateral branches; the leukocytes begin to penetrate the
film of blood, which, having coagulated, serves as a cement to help
hold the surfaces together. By their proliferation and more complete
organization the gap between the surfaces is bridged with both
fibrous and capillary bloodvessels, and within sixty or seventy hours
the clot has become largely replaced by organized cells. Meantime
from the endothelial cells of the vessels and vascular spaces, as well
as from the fixed cells of the connective tissue, the so-called
fibroblasts are formed, which are later converted into connective
tissue. Many of the cells which have wandered to the scene of
activity, or have been there reproduced in unnecessary numbers,
disappear again, either into the circulation or they serve as food for
the fibroblasts. Branching cells attach themselves more intimately,
and thus the original clot is completely converted into fibrous and
connective tissue, and this becomes a scar, which extends as deeply
as did the original injury. New capillaries are rapidly formed by a
budding process, and supply the pabulum required for nourishment
of the new cells. By fusion or amalgamation of neighboring vascular
buds complete new vessels are formed, extending through the new
tissue from one side to the other, while around them the fibroblasts
or connective-tissue elements arrange themselves. From this it will
appear that the coagulum which forms within a wound is desirable as
a scaffolding upon which the process of repair may be begun. But it
is desirable that this coagulum should be small in amount, in order
that these processes may not be too long delayed; hence the
advisability of removing all clots within a wound when closing it, and
preventing the formation or leaving of dead spaces in the tissues in
which blood clots may collect.
The process of granulation is not dissimilar to that described
above, save only in its gross appearances. Granulations consist of
vascular buds surrounded by leukocytes and lightly covered by
them, while around the base of each bud epithelioid and spindle cells
arrange themselves, these fixed cells organizing themselves more
and more, as the wound fills up, with the more superficial layers of
granulations. In time they are converted into a dense fibrous tissue
which forms later what is known as the scar. As before, also, the
spaces between the young capillary loops are filled with large
nucleated cells derived from the fixed cells of the tissue, and from
the endothelial lining of the newly formed vessels. Thus fibroblasts
are produced in each case, and are often more or less mingled with
giant cells, especially if some foreign body, such as a silk ligature, be
embodied in the tissues. The particular function of the leukocytes
seems to be the removal of red corpuscles and fibrin from the
original clot.
The granulation tissue thus constituted by capillary loops and
proliferating cells constitutes the basis of all wound repair. Later this
tissue assumes more of the fibrous and less of the cellular character,
while the fibroblasts arrange themselves in accordance with the
mechanical requirements of the tissues and the stress or strain
placed upon them. This tissue is at first vascular, but as it condenses
its capillaries become less numerous and smaller, and the final white
fibrous scar is usually almost bloodless.
When there has been loss of skin, or when skin edges are not
brought together, the deeper process of granulation needs an
epithelial covering, which cannot be afforded by mesoblastic or
endothelial cells. The formation of an epithelial or epidermal covering
is a process peculiar to epithelial tissue alone, and takes place
mainly from the cells of the rete Malpighii.
Epithelial elements of the skin will afford a large amount of
covering, and yet even their activity sometimes is insufficient and
has to be atoned for by skin grafting. Should the granulating surface
be small, and so situated that the fluid upon its surface may dry by
evaporation, there will result a crust or scab, which, while it conceals
from observation what is going on beneath, serves as an admirable
protection, beneath which proliferation of epithelium takes place. A
spontaneous detachment of the scab may take place when this
process is complete, and with the loosening of the crust it is
apparent that repair has become complete. This is known as healing
under a scab or under a crust.
Two clean and healthy granulating surfaces may be so placed in
contact with each other as to blend together by exactly the same
process as that by which granulations are first formed. This is called
secondary adhesion, or by the older writers the “third intention.”
Advantage is taken of this possibility in the application of what are
called secondary sutures, which may be placed some days before
they are utilized, with the intent to bring together surfaces so soon as
they shall present granulations.
One of the most interesting of all healing processes is that by
which severed tissues, when promptly replaced, often reëstablish
vascular communication and grow again in a satisfactory manner.
Thus a severed ear, nose, or finger-tip may be replaced, and, if
carefully held in situ, the parts being kept at rest, will prevent
disfigurement and the loss of important tissues. In these cases the
severed tissue remains passive several days until it has become
vascularized. Meantime its nutrition seems to be maintained through
the medium of the living tissues to which it has been affixed,
probably by absorption of their blood plasma.
Two human tissues are essentially non-vascular, the cornea and
cartilage. The former appears to be nourished by cellular interspaces
which may admit leukocytes from the surrounding tissues, and
through these proliferation and vascularization occur; while a scar in
the cornea remains permanent, and the new tissue by which repair is
brought about never becomes transparent like the cells composing
the cornea proper. In cartilage scar tissue is produced, as in other
tissues, by a similar process, in spite of the extent of the
cartilaginous layer and its non-vascularity. In general the more
specialized a tissue the less completely does it heal, and the
specialized tissues, like the retina, etc., seem to be incapable of
reproducing themselves. Low down in the animal scale some parts
can be more or less reproduced. In the ascending forms there is less
tendency in this direction; in man there is little reproduction of an
original tissue, scar tissue taking the place of most of that which has
been lost. An apparent exception to this is seen in the osseous
system, where a large amount of bone may often be reproduced.
Epithelium, also, whether on the external or internal surfaces of the
body, can regenerate itself in large degree and amount. From every
small island or mass of epithelial cells which can be retained new
cells may thus be reproduced; hence accrues the advantage of
leaving such epithelial collections whenever possible, and wherever
they may be beneficial. If upon a burnt area it happens that
epithelium has not been completely destroyed, new skin may be
confidently looked for from each clump of epidermal cells. It should
be remembered, however, that with the epidermization of a surface
under these circumstances merely an epithelial covering is secured.
The distinctively dermal appendages, such as hair, sweat glands,
and sebaceous glands, are not reproduced. If the highest ideal
results are to be secured in any case the parts must be put in the
most favorable condition, which means early surgical attention to
every wound.
INJURIES TO VESSELS.
Bloodvessels are subject to contusion, to laceration, and to
incision. They may be contused by superficial blows, compressed
against underlying bone, torn in the replacement of old dislocations,
or punctured or incised by accidental or homicidal injuries. A vessel
which is not abruptly divided but is seriously injured will usually
sustain a separation of its internal and middle coats, which curl up
within the external coat, occlude the channel, and lead to
thrombosis. A vessel thus occluded may tend to gangrene of the
parts supplied by it or to a temporary ischemia, with numbness and
pallor if an artery, or to passive edema if a vein. In cases of such
injury it is always hoped that the blood supply will be provided
through the collateral circulation. If a vessel be torn or cut across
there may result a hematoma which may lead to immediate
prostration, from hemorrhage, and to gangrene by stopping the
blood supply. Such blood tumor rarely pulsates, but may cause
extreme pain. The character and the size of the swelling will depend
upon the tissues which surround the injured vessel. Cessation of the
pulse on the distal side of an injury nearly always implies temporary
occlusion. Traumatic aneurysm may be produced by lateral injury to
an arterial trunk, by which its continuity as such is yet not completely
disrupted.
If a large outpour of blood has occurred it will be safer to incise
and turn out the clot and secure the injured vessel. In milder cases
the surgeon should do all that he can by rest and by position to favor
restoration of blood circulation. After the subsidence of acute
symptoms massage and gentle motion will serve to promote
absorption of the escaped blood. Cases will occasionally occur in
which the principal arterial trunk of a limb should be tied, hoping
thereby to save the member. Amputation may be the last resort
when gangrene is impending.
Injury to the veins is of a less serious nature in so far as immediate
consequences are concerned; nevertheless a punctured wound or a
large vein is always a serious matter. The pressure of the blood may
produce gangrene, or cause so large a hematoma that it should be
incised.
Fine silk sutures may be applied to wounded vessels, arteries or
veins, when they have been partially severed.
The healing process in all these cases is essentially the same. It
may mean the formation of a clot in or around a vessel, followed by
absorption of its principal portion and organization of what remains.
A vessel itself which has once been occluded by thrombus will
usually remain closed, a cord of fibrous tissue taking its place. Only
in rare instances is continuity of the blood channel preserved or
regained. In such cases the collateral circulation affords the life-
saving feature. The granulations which intrude themselves into the
clot gradually substitute tissue for coagulum, the conversion
beginning promptly, but often occupying weeks for its completion.
Lymph vessels may be lacerated in almost any injuries and more
or less lymph escape with the blood. When the skin is torn from the
underlying parts lymph collects in the cavity thus made, while its wall
may undergo more or less organization, and formation of a lymph
cyst results. Should one of these connect with a good-sized lymph
duct, as, for instance, in the neck the thoracic duct, then lymph cysts
of considerable size might form. Should these rupture or be opened
lymph fistulæ might result.
INJURIES OF NERVES.
By small hemorrhages into a nerve sheath nerve function may be
either temporarily or permanently disturbed. A compression too long-
continued may lead to degeneration within the nerve fibers.
Providing this do not occur there may be complete restoration of
function, or there may result chronic neuritis, with pain and irritation.
A later consequence of all nerve injuries is more or less serious
disturbance of sensation, while still later parts supplied by the
affected nerves may undergo more or less atrophy as well as spastic
contraction, by which loss of function and deformity are produced.
There is a form of nerve injury which is due to the temporary
pressure of the elastic tourniquet, frequently applied around limbs
previous to operations, or to pressure which is made by crutch
handles upon the axillary plexus, and called crutch paralysis. Limbs
carelessly allowed to hang over the edge of the operating table
during prolonged operations also have suffered in the same way.
Such lesions are of the character of a contusion, but are often
followed by paresis, paralysis, and by various sensory disturbances.
Injury to a nerve trunk having been recognized by a study of the
local features of a given case requires special treatment in case
laceration or more localized division can be assumed. The nerve
known to be lacerated and torn across should have its ends
freshened and be reunited by fine catgut sutures; also a nerve trunk
known to be punctured or divided. Such injury is not necessarily
inflicted from without, as it may be produced by a fragment of bone;
in this case the operation should be directed toward the bone as well
as toward the nerve trunk itself. A divided nerve trunk, if neatly
sutured, heals by the organization of blood clot, as in other
instances, actual nerve communication being made across the
intervening clot by a process of regeneration or reduplication of the
true nerve elements, the peripheral neurilemma playing an important
part. Autogenetic power decreases with the age of the individual. By
careful nerve suturing disability may be prevented.
Even months after injury much can be accomplished by nerve
suture properly performed. Symptoms similar to those of division
may occur when a nerve trunk is surrounded and compressed by
bone callus after fracture, as when the ulnar nerve is thus caught. If
too long a time have intervened it may be necessary to exsect the
injured portion and then bring the ends into apposition by sutures.
Other methods of atoning for these nerve injuries by nerve grafting,
etc., will be described in the chapter on Surgery of the Peripheral
Nerves.
Neuritis may be overcome by counterirritation, preferably with the
actual cautery, i. e., the “flying cautery,” by massage, and by
galvanization. The pain in many of these cases can be mitigated, if
not completely relieved, by the x-rays, or by the high-frequency
current. In some cases nerve elongation may be brought to bear and
a tender and irritable nerve be thus brought under subjection.
INJURIES TO BONES.
Aside from simple and compound fractures, which are essentially
bone wounds, there may be seen hemorrhages beneath the
periosteum or in the immediate vicinity of bones, which are usually
small in amount, yet may cause considerable disturbance. The
traumatic hematoma of the scalp which often follows delivery is an
illustration of an injury of this class, the periosteum itself being
sometimes separated. Collections of blood under these
circumstances which fail to disappear by absorption may be incised
and the contained clot turned out.
PLATE XII
FIG. 1