A producer is said to have an absolute advantage in the production of a good whe
ID: 1209273 • Letter: A
Question
A producer is said to have an absolute advantage in the production of a good when:
A.the producer has a lower opportunity cost than another producer.
B. the producer can sell the good at a higher price than another producer.
C.the producer can produce more units of the good per hour than another producer.
D.the producer has a higher opportunity cost than another producer.
Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples in a year or 500 pounds of oranges. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above. The opportunity cost of producing one pound of oranges in Zeta is:
A.
1 pound of apples.
B.
0.5 pounds of apples.
C.
2 pounds of apples.
D.
0.33 pounds of apples.
Agraria is a small agricultural country that does not trade with the rest of the world. Based on this information, we can conclude that Agraria is a(n) ________ economy.
A.
closed
B.
command
C.
communist
D.
open
Industria is predominantly a producer and exporter of manufactured goods. However, it imports several agricultural products.
Refer to the scenario above. Recently, the government has imposed a tariff on the import of some cash crops. Which of the following is likely to happen in this case?
A.
The domestic consumers of these crops will be better off.
B.
The cost of importing these crops will fall.
C.
The import of these crops will increase.
D.
The government's revenue will increase.
Which of the following is true of tariffs?
A.
Tariffs decrease the prices of imports.
B.
Tariffs reduce the volume of exports.
C.
Tariffs encourage international trade.
D.
Tariffs are special taxes levied on imports.
If ________, net exports are negative.
A.
imports exceed exports
B.
exports exceed transfer payments
C.
imports exceed transfer payments
D.
exports exceed imports
The dividend earned by a domestic resident on a stock owned in a foreign company is an example of a(n) ________.
A.
export by the domestic resident
B.
import by the domestic resident
C.
transfer payment received from foreigners
D.
factor payment received from foreigners
If a consumer in UK buys a camera from a manufacturer in the U.S., everything else remaining unchanged, ________.
A.
the U.S.'s net transfer payment will increase
B.
the UK's net factor payment from abroad will fall
C.
there will be a deficit in U.S.'s financial account
D.
the U.S.'s net exports will increase
Explanation / Answer
D.The government's revenue will increase. Tariff is part of government revenue.
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