Question 1

A Japanese-made automobile purchased by a U.S. citizen is an example of a U.S. _____, and a U.S.-made automobile purchased by a Japanese citizen purchasing is an example of a U.S. _____.

Accepted Answer

An import is a good or service brought into one country from another, while an export is a good or service sent from one country to another. In the given scenario, the Japanese-made automobile purchased by a U.S. citizen is an example of an import for the U.S. and a U.S.-made automobile purchased by a Japanese citizen is an example of an export for the U.S. Hence, the answer is option C - import; export.

Question 2

A Korean-made washing machine purchased by a Chinese citizen is an example of a Korean _____, and a Chinese-made washing machine purchased by a Korean citizen is an example of a Korean _____.

Accepted Answer

A Korean-made washing machine purchased by a Chinese citizen represents a Korean export because it is a product made in Korea and sold abroad. Conversely, a Chinese-made washing machine bought by a Korean citizen is an example of a Korean import, as it is a product made outside Korea and brought into the country.

Question 3

An import is a good or service:

Accepted Answer

An import is a good or service purchased from a foreign seller.

Question 4

An export is a good or service:

Accepted Answer

An export is a good or service that is sold to a foreign buyer.

Question 5

Argentina and Chile both produce copper and timber. If Chile produces copper much more efficiently than Argentina and timber slightly more efficiently than Argentina, _____ can benefit from trading copper and timber with each other.

Accepted Answer

Both countries can benefit from trading because Argentina can trade its timber with Chile for copper, which Chile produces more efficiently. This allows both countries to specialize in their comparative advantage and have access to a greater variety of goods.

Question 6

Russia and Kazakhstan both produce horses and oil. If Kazakhstan is much more efficient than Russia in the production of horses and slightly more efficient than Russia in the production of oil, _____ can benefit from trading horses and oil with each other.

Accepted Answer

Both countries can benefit from trading with each other as Kazakhstan's efficiency in producing horses and oil means that they can sell these products at a lower cost. Russia can benefit from buying these products at a lower price while Kazakhstan can benefit from selling them at a higher price than their production cost, thus increasing their overall revenue. This results in a mutually beneficial trade for both countries.

Question 7

Suppose that one hour of labor in Singapore can produce 20 computers or 40 cellphones. Further, suppose that one hour of labor in Ireland can produce 10 computers or 15 cellphones. _____ has a comparative advantage in the production of computers. _____ has a comparative advantage in the production of cellphones.

Accepted Answer

Ireland has a comparative advantage in producing computers because it has a lower opportunity cost (1.5 cellphones per computer) compared to Singapore (2 cellphones per computer). Singapore has a comparative advantage in producing cellphones because it has a lower opportunity cost (0.5 computers per cellphone) compared to Ireland (0.67 computers per cellphone).

Question 8

One hour of labor in Mexico can produce 10 avocados or 20 bananas. One hour of labor in Canada can produce four avocados or 16 bananas. _____ has a comparative advantage in the production of avocados. _____ has a comparative advantage in the production of bananas.

Accepted Answer

Mexico has a lower opportunity cost for producing one avocado (giving up the production of 2 bananas) compared to Canada (giving up the production of 4 bananas). Therefore, Mexico has a comparative advantage in the production of avocados. Canada has a lower opportunity cost for producing one banana (giving up the production of 0.25 avocados) compared to Mexico (giving up the production of 0.5 avocados). Therefore, Canada has a comparative advantage in the production of bananas.

Question 9

Countries benefit from trade by exporting goods in which their opportunity costs are relatively _____ and importing goods in which their opportunity costs are relatively _____.

Accepted Answer

Countries benefit from trade by exporting goods in which their opportunity costs are relatively low (meaning they are relatively efficient at producing those goods) and importing goods in which their opportunity costs are relatively high (meaning they are relatively inefficient at producing those goods). This is the principle of comparative advantage.

Question 10

Countries benefit from trade by importing goods in which their opportunity costs are relatively _____ and exporting goods in which their opportunity costs are relatively _____.

Accepted Answer

According to the theory of comparative advantage, countries benefit from trade by importing goods in which their opportunity costs (the value of the next best alternative foregone) are relatively high and exporting goods in which their opportunity costs are relatively low. This leads to specialization and increased efficiency in production, ultimately resulting in higher output and greater economic welfare for all countries involved in the trade. Therefore, the best choice is D - high opportunity cost imports and low opportunity cost exports.

Question 11

(Table: U.S. International Trade in Goods and Services, 2016, in millions of dollars. Details may not equal totals, due to seasonal adjustment and rounding.)
What is the value of goods that the United States exported (in millions of dollars) in 2016?

Accepted Answer