Homework
China and Japan both produce clothing and computers. China is said to have the comparative advantage in producing clothing if _______.
a. Japan has an absolute advantage over China in producing computers
b. the opportunity cost of producing clothing is lower for Japan than it is for China
c. China requires fewer resources than Japan to produce clothing
d. the opportunity cost of producing clothing is lower for China than it is for Japan
d. the opportunity cost of producing clothing is lower for China than it is for Japan
Define exports
goods produced domestically and sold abroad
Comparative advantage definition
The ability to produce
a good at a lower opportunity cost than another
producer
Economists use the term absolute advantage when describing the opportunity cost of two producers.
True
False
False
Which of the following statements about comparative advantage is NOT true?
a. A country cannot have a comparative advantage in producing a good unless it has an absolute advantage in producing that good.
b. Economists use the principle of comparative advantage to emphasize the potential benefits of free trade.
c. Comparative advantage is determined by the opportunity cost of production.
d. The principle of comparative advantage applies to countries as well as to individuals.
a. A country cannot have a comparative advantage in producing a good unless it has an absolute advantage in producing that good.
Define Imports
goods produced abroad and sold domestically
As a college student your scarce resource is ___
time
The most important factor in economic production is ___
Technology
If Jeff can produce more cookies in one day than Josie can produce in one day, then _______.
a. Josie has a comparative advantage in the production of cookies
b. Jeff has a comparative advantage in the production of cookies
c. Jeff has an absolute advantage in the production of cookies
d. Josie has an absolute advantage in the production of cookies
c. Jeff has an absolute advantage in the production of cookies
Define Absolute Advantage
The ability to produce a
good using fewer inputs than another producer
What is interdependence?
Every day you rely on many people from around
the world, most of whom you’ve never met, to provide you with the goods and services you enjoy.
___ is the study of economy wide phenomena, including inflation, unemployment, & economic growth.
Macroeconomics
China has a comparative advantage in the production of silk, but Japan has an absolute advantage in the production of silk. If these two countries decide to trade, _______.
a. It's impossible to know who should trade to whom without additional information
b. trading silk would provide no net advantage to either country
c. China should export silk to Japan
d. Japan should export silk to China
c. China should export silk to Japan
What is the United States' biggest export?
The dollar
What is the U.S. National Debt?
$37 trillion
Specialization=
Absolute advantage is _______.
a. a graph that shows the combinations of output that the economy can possibly produce, given the available factors of production and the available production technology
b. the ability to produce a good at a lower opportunity cost than another producer
c. the ability to produce a good using fewer inputs than another producer
d. whatever must be given up to obtain some item
c. the ability to produce a good using fewer inputs than another producer
What country is the number 1 holder of U.S. Treasuries?
Japan
Absolute advantage measures the ___ of a good
in terms of the ___ required to produce it.
cost; inputs
Gold;Bitcoin