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Macroeconomics: International Trade Questions with
Detailed Verified Answers
Specialization is based on ______ advantage, not necessarily on whether one country can produce
more of a good than another country. Ans: ✓ ✓ ✓ comparative
The producer with the _____ relative opportunity cost has a comparative advantage and should
specialize in the production of that good. Ans: ✓ ✓ ✓ lowest
By expanding markets, international trade benefits a country in important ways including: Ans: ✓ ✓
✓ -trade provides consumers access to different types of goods, services, and resources that were
previously unavailable, increasing their well-being.
-goods that were relatively more expensive can be purchased for less from foreign producers,
increasing consumers' purchasing power and making their income go further
The model and concepts used to develop the economics of _____ are similar to those used to
illustrate the effects of _____ Ans: ✓ ✓ ✓ international trade; trade between individuals
Given the option of being self-sufficient or trading with others, as long as a _____ exists, there will
be potential for trade to make both parties better off. Ans: ✓ ✓ ✓ comparative advantage
The dollar value of a quota rent is equal to the size of the quota Ans: ✓ ✓ ✓ times the difference
between the quota price and the world price
The goods and services made in other countries that we purchase are Ans: ✓ ✓ ✓ import
In economics, we state that trade: Ans: ✓ ✓ ✓ creates wealth
Given the option of being self-sufficient or trading with others, as long as a _____ exists, there will
be potential for trade to make both parties better off. Ans: ✓ ✓ ✓ comparative advantage
for two parties to be willing to trade, trade terms must be: Ans: ✓ ✓ ✓ -terms of trade must be
less than the buyer's opportunity cost but greater than the sellers opp. Cost
© Get it right 2025 Getaway - Stuvia US All rights reserved
Macroeconomics: International Trade Questions with
Detailed Verified Answers
Specialization is based on ______ advantage, not necessarily on whether one country can produce
more of a good than another country. Ans: ✓ ✓ ✓ comparative
The producer with the _____ relative opportunity cost has a comparative advantage and should
specialize in the production of that good. Ans: ✓ ✓ ✓ lowest
By expanding markets, international trade benefits a country in important ways including: Ans: ✓ ✓
✓ -trade provides consumers access to different types of goods, services, and resources that were
previously unavailable, increasing their well-being.
-goods that were relatively more expensive can be purchased for less from foreign producers,
increasing consumers' purchasing power and making their income go further
The model and concepts used to develop the economics of _____ are similar to those used to
illustrate the effects of _____ Ans: ✓ ✓ ✓ international trade; trade between individuals
Given the option of being self-sufficient or trading with others, as long as a _____ exists, there will
be potential for trade to make both parties better off. Ans: ✓ ✓ ✓ comparative advantage
The dollar value of a quota rent is equal to the size of the quota Ans: ✓ ✓ ✓ times the difference
between the quota price and the world price
The goods and services made in other countries that we purchase are Ans: ✓ ✓ ✓ import
In economics, we state that trade: Ans: ✓ ✓ ✓ creates wealth
Given the option of being self-sufficient or trading with others, as long as a _____ exists, there will
be potential for trade to make both parties better off. Ans: ✓ ✓ ✓ comparative advantage
for two parties to be willing to trade, trade terms must be: Ans: ✓ ✓ ✓ -terms of trade must be
less than the buyer's opportunity cost but greater than the sellers opp. Cost
© Get it right 2025 Getaway - Stuvia US All rights reserved
