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Microeconom ics, 3e Tests, Surveys, and Pools Tests Edit Mode is: ON
Test Canvas : Self-Test Quiz - Chapter 08
The Test Canvas allows you to add and edit questions, add Question Sets or Random Blocks, reorder questions,
and review the test. More Help
Description
Instructions
Total Questions 20
Total Points 20
Question The United States has a comparative advantage in the production of aircrafts,
because this task is intensive in the use of:
Answer human capital.
physical capital.
land.
Correct Correct! The Heckscher-Ohlin model explains why a country that is relatively
Feedback abundant in one factor of production will have a comparative advantage in goods
that use that factor intensely. Section: Sources of Comparative Advantage
Incorrect Incorrect! The United States has a relative abundance of human capital in form of
Feedback highly educated workers. The Heckscher-Ohlin model explains why a country that
is relatively abundant in one factor of production will have a comparative advantage
in goods that use that factor intensely. Section: Sources of Comparative Advantage
Correct Correct! When increasing returns are present, there is cause for an industry to be
Feedback concentrated in one location. Section: Skill And Comparative Advantage
Incorrect Incorrect! Here, the term increasing returns refers to the fact that the ratio of output
Feedback to inputs rises along with production levels. Section: Skill And Comparative
Advantage
Question Suppose that Great Britain and France each specializes according to its own
comparative advantage, so that Great Britain produces fish and France produces
wine. Then they engage in trade. This means that:
Answer each nation will experience more unemployment than they would under
conditions of autarky.
each nation can consume more of both goods than they could under conditions
of autarky.
all wine consumers will gain and all wine producers will lose.
all wine producers will gain and all wine consumers will lose.
4. Multiple Choice: Sid and Nancy have opened a small sho... Points: 1
Question Sid and Nancy have opened a small shop selling tea and crumpets. Sid takes one
hour to brew one pitcher of tea, and three hours to bake one plate of crumpets.
Nancy also takes one hour to brew one pitcher of tea, and two hours to bake one
plate of crumpets. From this information, we know that:
Answer Sid's opportunity cost of brewing one pitcher of tea is 3 plates of crumpets.
between the two of them, neither Sid nor Nancy has a comparative advantage
in brewing tea.
Correct Correct! Nancy has the comparative advantage in baking crumpets. Section:
Feedback Production Possibilities and Comparative Advantage, Revisited
Incorrect Incorrect! Sid brews one pitcher of tea in one hour and he can bake 1/3 of a plate of
Feedback crumpets in one hour. Nancy brews one pitcher of tea in one hour and she can
bake 1/2 of a plate of crumpets in one hour Thus Sid has to give up fewer crumpets
(1/3) than Nancy (1/2) when he brews a pitcher of tea. He has a comparative
advantage in brewing tea. Section: Production Possibilities and Comparative
Advantage, Revisited
Question The opening of trans-Atlantic trade in the late nineteenth century had a large
negative impact on:
Answer land rents in Europe.
wages in Europe.
Correct Correct! As agricultural activity was shifted away from Europe and towards the
Feedback land-abundant countries, landowners in Europe experienced a decline in the value
of this asset. Section: International Trade and Wages
Incorrect Incorrect! The opening up of trade meant that there was less agricultural activity in
Feedback Europe. Demand for land declined as did the rent for land. Section: International
Trade and Wages
Question Which of the following is not one of the standard arguments for restricting imports?
Answer infant industry protection
job creation
national security
Correct Correct! Gold is no longer the medium used to finance international trade. Section:
Feedback Arguments for Trade Protection
Incorrect
Feedback incorrect! Gold is no longer used to finance trade between countries. Section:
Arguments for Trade Protection
Question In which of the following areas does the United States limit imports?
Answer Clothing and textiles
butter
agriculture
automobiles
Correct Consequently, consumers pay higher prices for these goods than they would
Feedback otherwise. Section: Trade Protection in the United States
Incorrect In which areas have political lobbies for protection been successful? Section: Trade
Feedback Protection in the United States
imports those goods for which the world price exceeds the domestic price.
Correct Correct! Under conditions of autarky, the price of a good is determined by domestic
Feedback supply and demand. Section: Production Possibilities and Comparative Advantage,
Revisited
Incorrect Incorrect! Autarky is a situation in which a country does not trade. It can be used
Feedback as a point of comparison with what conditions are like when a domestic market is
opened up to trade. Section: Production Possibilities and Comparative Advantage,
Revisited
Question When the world price of a good exceeds the domestic price, a country is MOST
likely to:
Answer import the good.
Correct Correct! People within the country will have an incentive to purchase the good
Feedback domestically and then offer it for sale overseas. Section: Supply, Demand, and
International Trade
Incorrect Incorrect! This situation is most likely to arise when a country enjoys a comparative
Feedback advantage in production of the good. Section: Supply, Demand, and International
Trade
Question If a country imports a good for which the world price is below its domestic price:
Answer there will be a net loss in total surplus.
Correct Correct! Consumers will gain from being able to purchase the good at a lower price,
Feedback but the amount of producer surplus will be reduced. Section: Supply, Demand, and
International Trade
Incorrect Incorrect! Consumer and producer surplus are maximized at equilibrium. When a
Feedback new price is imposed below the equilibrium price as a result of trade, consumers
will gain and producers will lose but the gain to consumers exceeds the loss to
producers. Section: Supply, Demand, and International Trade
Question Which of the following statements best describes the effects of trade?
Answer A country that imports a lot of goods will experience a high level of domestic
unemployment.
A country is most likely to export those goods for which the domestic price
exceeds the world price.
All countries benefit when each country specializes according to its own
comparative advantage.
When a country imports goods, those who purchase the good will experience a
decline in consumer surplus.
decrease both the price paid by consumers and the price received by
producers.
increase both the price paid by consumers and the price received by
producers.
Correct Correct! A tariff raises the price of the good and reduces the quantity traded.
Feedback Section: The Effects of a Tariff
Incorrect Incorrect! A tariff raises the price of the good and reduces the quantity imported.
Feedback Domestic producers offer their goods at a higher price, and domestic consumers
pay a higher price. Section: The Effects of a Tariff
Correct Correct! Jobs are reallocated among industries as a result of trade patterns.
Feedback Section: The Gains from International Trade
Incorrect Incorrect! With trade, the productive resources of a country will be concentrated in
Feedback those industries where they can be employed at a comparative advantage. Section:
The Gains from International Trade
Question According to the Heckscher-Ohlin model, a country will export those goods:
Answer for which the world price is below the domestic price.
Correct Correct! Comparative advantage arises from the relative factor intensity. Section:
Feedback Sources of Comparative Advantage
Incorrect Incorrect! The Heckscher-Ohlin model asserts that factor intensity gives rises to
Feedback comparative advantage. Section: Sources of Comparative Advantage
made all consumers worse off and all producers better off.
Correct Correct! Because the United States exports goods that are intensive in the use of
Feedback human capital, there is a higher demand for highly skilled labor. Section:
Comparative Advantage Versus Absolute Advantage
Incorrect Incorrect! The Heckscher-Ohlin model posits that a country will have a comparative
Feedback advantage when there is relative factor intensity. Which of these is a factor
abundant in the United States? Section: Comparative Advantage Versus Absolute
Advantage
16. Multiple Choice: What is the effect of the quota impos... Points: 1
Question What is the effect of the quota imposed on sugar imports into the United States?
Answer Consumers pay a lower price for sugar than they would otherwise.
Poor countries are able to grow and export more sugar than they would
otherwise.
The government collects the quota rent in the form of tax revenue.
The price of sugar within the United States is roughly twice the level of the
world price.
Correct Correct! By restricting the quantity supplied, a quota increases the price. Section:
Feedback The Effects of an Import Quota
Incorrect Incorrect! A quota limits the quantity supplied to an amount less than what would
Feedback be traded under conditions of free trade. The domestic price rises. Section: The
Effects of an Import Quota
17. Multiple Choice: Which group of people would be most l... Points: 1
Question Which group of people would be most likely to support a tariff imposed on cotton
imported into the United States?
Answer cotton growers in the United States
Correct Correct! Cotton growers will benefit from the higher prices. Section: International
Feedback Trade Agreements and the World Trade Organization
Incorrect Incorrect! Who will benefit from the higher prices? Cotton Growers in the United
Feedback States. Section: International Trade Agreements and the World Trade Organization
very high in comparison to other countries and have increased over time.
Correct Correct! Import tariffs are essentially zero for manufacturing imports. Section:
Feedback Economics in Action: Trade Protection in the United States
Incorrect Incorrect! Import tariffs have decreased over time and are nearly non-existent for
Feedback manufactured goods. Section: Economics in Action: Trade Protection in the United
States
19. Multiple Choice: What authority does the World Trade O... Points: 1
The World Trade Organization has the authority to determine whether a country
is exporting those goods which are intensive in using factors of production
abundant within its borders.
The World Trade Organization has the authority to create jobs in importing-
competing industries.
The World Trade Organization has the authority to resolve disputes between
countries regarding the enforcement of trade agreements.
Correct Correct! The WTO administers trade agreements that countries have negotiated
Feedback amongst themselves. Section: International Trade Agreements and the World Trade
Organization
Incorrect Incorrect! Once two or more countries have signed an agreement governing trade
Feedback between them, the WTO serves to enforce the agreement. Section: International
Trade Agreements and the World Trade Organization
20. Multiple Choice: Many of the commonplace items that yo... Points: 1
Question Many of the commonplace items that you use everyday are manufactured in Asia.
If the Heckscher-Ohlin model applies, what would account for this?
Answer The United States has used its military power to oppress the people of Asia
and force them to work for low wages.
Correct Correct! Wages for simple assembly work are lower in Asia than in the United
Feedback States Section: Sources of Comparative Advantage
Incorrect Incorrect! The Heckscher-Ohlin model predicts that a country will benefit from
Feedback exporting those items that are produced by factors in which it is most abundant.
Section: Sources of Comparative Advantage
OK
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We thought we’d done pretty well until Old Rudy started at us. Then
we realized that we weren’t much better than a gang of Huns. He
certainly did take the skin off! According to him Robinson should
never have scored and we should have had twenty-one points
tucked away. At that, he wasn’t so far wrong, for we had surely
pulled a lot of dub plays in that first fifteen minutes. Anyhow, when
he’d got through with us we were ready to go back and bite holes in
the Robbies!
The third quarter gave us another touchdown, and this time Toots
booted it over. But Robinson wasn’t dead yet, and she put a scare
into us when she sprang a new formation and began to circle our
ends for six and eight yards at a try. Pete was put out of it and
Gannet, who took his place, was pretty punk. We lost two or three
other first-string men in that third period, and so when Robinson
worked down to our fifteen-yard line we couldn’t stop her. We did
smear her line attacks, but she heaved a forward and got away with
it, and kicked the goal a minute later. That made the score 11 to 10,
and the world didn’t look so bright for us. And then, when the last
quarter was about five minutes old, Saunders, who was playing back
with Peck, let a punt go over his head and they had us with our heels
to the wall. Curtis punted on second down and the ball went crazy
and slanted out at our forty-yard line. Robinson tried her kicks again
and came back slowly. Pete Rankin put himself back in the game
and that helped some. About that time when the enemy was near
our twenty-five, Peck got a kick on the head and had to have time
out. Old Rudy started Kingsley to warming up on the side line, but
Peck, although sort of groggy, insisted on staying in, and Pete let
him.
They edged along to our twenty and then struck a snag and that’s
when I stopped taking much interest in events, for I was the snag.
When I came around I was lying on a nice bank of hay, with every
bone in my head aching, and Prentiss was playing my position. So
what happened subsequently was seen by little Joe from afar.
Robinson put another field goal over and added three points to her
score and we saw the game going glimmering. There was still five
minutes left, however, and an optimist next to me on the hay pile
said we could do it yet. I didn’t think we could, but I liked to hear him
rave.
The five minutes dwindled to four and then to three. We had the
ball in the middle of the field and were trying every play in our bag of
tricks. But our end runs didn’t get off, our forward passes were
spoiled and we were plainly up against it. Young Peck’s voice got
shriller and shriller and Pete’s hoarser and hoarser, and the rooters
were making noises like a lot of frogs. And then the timekeeper said
one minute and it looked as though there was nothing left but the
shouting.
We still had the pigskin and had crossed the center line two plays
back, and Pete and Peck were rubbing heads while the Robbies
jeered. Then something broke loose, and after I’d got a good look at
it I saw that it was Peck.
I don’t know how he got away, for it looked as if he had sort of
pulled a miracle, but there he was, dodging and streaking with the
mob at his heels and a quarter and a half laying for him up the field.
The optimist guy almost broke his hand off pounding my sore
shoulder and I let him pound, for the pain helped me yell. Pete and
Trask trailed along behind Peck and it was Pete who dished the
waiting halfback. After that Peck had a free field and it was only a
question of his staying on his feet, for you could see that the kid was
all in. He got to wobbling badly at about the fifteen yards and I
thought sure a Robinson chap had him, but the Robbie wasn’t much
better off and they finally went across, staggering, with Peck just out
of reach, and toppled over the line together. Then bedlam broke
loose.
I must have forgotten my bum ankle, for the next thing I knew I
was down at the goal line with half the college, and the Naval
Reserve lieutenant had Peck’s head on his knees and was telling
Tracy, the trainer, what to do for him. Tracy sputtered indignantly and
swashed his sponge and Toots missed another goal and the game
was over. The crowd got some of the team but I was near the gate
and made my getaway. And so did Peck, thanks to the lieutenant
chap, and we were halfway to the gym before the fellows missed
him. We fought them off then right up to the gym door and dodged
inside, and Peck, who was all right now except for being short of
breath, said: “Thanks, West. I want you to know my brother.”
“Your brother!” I gasped. The Navy chap laughed and shook
hands.
“And proud of it,” he said. “The kid played good ball for a fellow
who couldn’t make the team last year, didn’t he?”
“Couldn’t make—Say, what’s the idea?” I gibbered. “Didn’t he play
quarter for Elm Park?”
“Why, no,” said the Navy guy, “that was me! Harold never played
any to speak of until this fall. He tells me that a roommate of his
taught him about all he knows. I want to meet that fellow!”
“Oh!” said I, still sort of dazed. “Well, I guess he will be mighty glad
to meet you, too. You see, he got it into his head that your brother
was the great Peck, and——”
“But I never told him anything like that!” exclaimed Harold. “Why, I
even pretended I’d never heard of you, Herb, for fear they might
think I was—well, trading on your reputation, don’t you see! I don’t
understand how Jim could have got that idea!”
“Oh, he gets crazy notions sometimes,” said I. “At that, though, he
wasn’t so far off, because if you’re not a Great Peck you’re a mighty
good eight quarts!”
Which wasn’t so poor for a fellow with half his teeth loose! Now
was it?
TERRY COMES THROUGH