Assume that the global economy consists of only two countries called F and G. It is said that there are only two goods, X and Y, at the same time. Below are the different combinations the two countries can each produce. Assuming that the cost of production is constant, what is the pre-trade opportunity cost of X 1 unit in Y?

1. (1) Country F: X 10 units or Y 20 units.

(2) Country G: X 10 units or Y 10 units.

2. (1) Country F: X 2 units or Y 4 units.

(2) Country G: X 3 units or Y 6 units.

3. (1) Country F: X 20 units or Y 5 units.

(2) Country G: X 18 units or Y 2 units.

4. Which of the cases presented in (1)-(3) above satisfies the following conditions? Choose all State F exports good Y and imports good X (In which situations country F will export good Y and import good X.)

5. Which of the cases presented in (1)-(3) above satisfies the following conditions? Choose all Situation where trade does not occur (In which situations no trade will take place.)

(6-8) Listed below are the different factors in which trade can provide benefits. Which of the following statements is true?

(a) Cost reduction

(B) Difference between demand and taste

(C) Increased competition

(D) Trade as a growth engine

(E) Non-economic factors

6. When the economies of countries other than a specific country expand, the demand for export of a specific country increases, and the export price increases relative to the import price.

7. Allowing imports freely could stimulate domestic producers to change more efficiently.

8. Production capacity can be increased through specialization for specific items to be exported.

9. Which of the following fits the definition of the terms of trade?

(a) Import price index divided by export price index

(B) Export price index divided by import price index

(c) the annual rate of change in the average import price divided by the annual rate of change in the average export price;

(d) the annual rate of change of the average export price divided by the annual rate of change of the average import price;

10. Listed below are different ways of intervening in trade. Which of the following statements is true?

(a) Customs duties

(B) Quarter

(C) Import license system

(d) Export subsidies

(E) embargo

(f) administrative barriers or regulations;

A government limit or regulation on the quantity of vehicles to be imported from a particular country.

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The pretrade opportunity cost of X 1 unit in Y for each country can be calculated by comparing the ratios of production between X and Y For Country F ... View the full answer