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___ 4. For Country X, what is the opportunity cost of producing one bushel of corn?
a. 1 bushel of rice
b. 2 5 bushel of rice
c. 2½ bushels of rice
___ 5. For Country Y, what is the opportunity cost of producing one bushel of rice?
a. 1 bushel of corn
b. 4 bushels of corn
c. ¼ bushel of corn
___ 6. Country Y has a comparative advantage in producing:
a. corn
b. rice
c. Both corn and rice
d. Neither corn nor rice
___ 7. Country X has a comparative advantage in producing:
a. corn
b. rice
c. Both corn and rice
d. Neither corn nor rice
___ 8. In order for a nation to trade according to comparative advantage:
a. its government must restrict imports in order to maintain its producers’ comparative
advantage
b. its government must direct producers to their comparative advantage
c. its government must allow free trade
d. Both a. and b. above
___ 9. The effect of a quota on imported shoes would include:
a. higher wages for U.S. shoe industry workers
b. higher profits for U.S. shoemakers
c. higher prices for U.S. shoe consumers
d. All of the above
___ 10. When a trade restriction is imposed:
a. domestic consumers lose
b. domestic producers gain
c. consumer loss exceeds producer gain
d. All of the above
___ 11. The political reason that trade restrictions are imposed is:
a. trade restrictions benefit the domestic economy
b. trade restrictions improve a nation’s standard of living
c. the benefits of trade restrictions are concentrated on a few producers, while the costs
of trade restrictions are dispersed over many consumers
d. Both a. and b. above
___ 12. Which of the following is not an argument for trade restrictions?
a. Infant industry argument
b. Consumer choice argument
c. Unfair foreign competition argument
d. Saving domestic jobs argument
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16 - 13 International Trade