Hey guys! could you please help me on these question...
1) For any country, if the world price of computers is higher than the domestic price of computers without trade, that country should
a. export computers, since that country has a comparative advantage in computers. *
b. import computers, since that country has a comparative advantage in computers.
c. neither export nor import computers, since that country cannot gain from trade.
d. neither export nor import computers, since that country already produces computers at a low cost compared to other countries.
2) Assume, for Canada, that the domestic price of steel without international trade is higher than the world price of steel. This suggests that, in the production of steel,
a. Canada has a comparative advantage over other countries and Canada will import steel.
b. Canada has a comparative advantage over other countries and Canada will export steel. *
c. other countries have a comparative advantage over Canada and Canada will import steel.
d. other countries have a comparative advantage over Canada and Canada will export steel.
3) In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that
a. Moldova can only import goods; it cannot export goods.
b. Moldova’s choice of which goods to export and which goods to import is not based on the principle of comparative advantage.
c. only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant.
d. Moldova is a price taker. *
4) When a country allows trade and becomes an exporter of a good,
a. domestic producers gain and domestic consumers lose.
b. domestic producers lose and domestic consumers gain.
c. domestic producers and domestic consumers both gain. *
d. domestic producers and domestic consumers both lose.
5) When a country allows trade and becomes an importer of a good,
a. everyone in the country benefits. *
b. the gains of the winners exceed the losses of the losers.
c. the losses of the losers exceed the gains of the winners.
d. everyone in the country loses.
6) Within a country, the domestic price of a product will equal the world price if
a. trade restrictions are imposed on the product.
b. the country allows free trade.
c. the country chooses to import, but not export, the product.
d. the country chooses to export, but not import, the product. *
My answers are the ones with the *..
what do you think?
1) For any country, if the world price of computers is higher than the domestic price of computers without trade, that country should
a. export computers, since that country has a comparative advantage in computers. *
b. import computers, since that country has a comparative advantage in computers.
c. neither export nor import computers, since that country cannot gain from trade.
d. neither export nor import computers, since that country already produces computers at a low cost compared to other countries.
2) Assume, for Canada, that the domestic price of steel without international trade is higher than the world price of steel. This suggests that, in the production of steel,
a. Canada has a comparative advantage over other countries and Canada will import steel.
b. Canada has a comparative advantage over other countries and Canada will export steel. *
c. other countries have a comparative advantage over Canada and Canada will import steel.
d. other countries have a comparative advantage over Canada and Canada will export steel.
3) In analyzing the gains and losses from international trade, to say that Moldova is a small country is to say that
a. Moldova can only import goods; it cannot export goods.
b. Moldova’s choice of which goods to export and which goods to import is not based on the principle of comparative advantage.
c. only the domestic price of a good is relevant for Moldova; the world price of a good is irrelevant.
d. Moldova is a price taker. *
4) When a country allows trade and becomes an exporter of a good,
a. domestic producers gain and domestic consumers lose.
b. domestic producers lose and domestic consumers gain.
c. domestic producers and domestic consumers both gain. *
d. domestic producers and domestic consumers both lose.
5) When a country allows trade and becomes an importer of a good,
a. everyone in the country benefits. *
b. the gains of the winners exceed the losses of the losers.
c. the losses of the losers exceed the gains of the winners.
d. everyone in the country loses.
6) Within a country, the domestic price of a product will equal the world price if
a. trade restrictions are imposed on the product.
b. the country allows free trade.
c. the country chooses to import, but not export, the product.
d. the country chooses to export, but not import, the product. *
My answers are the ones with the *..
what do you think?