In most countries today, many goods and services consumed are imported from abroad, and many goods and services produced are exported to foreign customers
True
Trade can make everybody better off because it
allows people to specialize according to comparative advantage
If China is capable of producing either shows or toy trains or some combination of the two, then
China's opportunity cost of shoes is the inverse of its opportunity cost of toy trains
Trade allows a country to consume its production possibilities frontier
True
A popular celebrity that is paid highly for her time should probably not mow her own lawn because
Her opportunity cost is mowing her lawn is higher than the cost of paying someone to mow it for her
The opportunity cost of an item
what you give up to get that item
If a country has a lower opportunity cost than its potential trading partner, the country should decide to be self sufficient
False
Trade between countries
allows each country to consume at a point outside its production possibilities frontier
In an economy consisting of two people producing two goods, it is possible for one person to have the absolute and comparative advantage
False
It is possible for the US to gain from trade with Germany even if it takes US workers fewer hours to produce every good than it takes German workers
True
Absolute advantage is found by comparing different producers
input requirements per unit of output
Trade does not benefit a nation if that nation has a comparative advantage in the production of that good
False
Suppose the US has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that
The US should produce more pork than what it requires and export some of it to Mexico
The production possibilities frontier illustrates
the combinations of output that an economy can produce
A person can benefit from specialization and trade by obtaining a good at a price that is
lower than his or her opportunity cost of that good.
The gains from trade are
a result of more efficient resource allocation than would be observed in the absence of trade
To produce 100 bushels of wheat, Farmer A requires fewer inputs than Farmer B does. We can conclude that Farmer A has an absolute advantage over Farmer B in producing wheat
True
If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then
Iowa has a comparative advantage in the production of corn
When an economics points out that you and millions of other people are interdependent, she is referring to the face that we all
Rely upon one another for the goods and services we consume