Comparative efficiency ratio (CER) helps to identify the most productive country, whereas Domestic Exchange ratio (DER) helps to determine the minimum prices that countries are willing to accept, in a trading situation.

true

false

Countries which view trade as a ______________ are more likely to collaborate / cooperate with others during international trade negotiations.

a. negative-sum game

b. zero-sum game

c. positive-sum game

Countries which view trade as a ______________ are less likely to collaborate / cooperate with others during international trade negotiations. a. negative-sum game

b. zero-sum game

c. positive-sum game

Suppose a capital (K) abundant country is trying to specialize in producing and exporting labor (L) intensive products. Which of the following is likely to be a challenge the country will soon confront?

a. relatively limited availability of labor

b. relatively high interest rates

c. relatively high interest rates

Suppose a labor (L) abundant country is trying to specialize in producing and exporting capital (K) intensive products. Which of the following is likely to be a challenge the country will soon confront?

a. relatively limited availability of labor

b. relatively limited availability of capital

c. relatively high wage rates

Consider the Output Table below regarding two countries (Eldorado, and Atlantica) producing either Calculators, or Shoes.

Output Table:

	Calculators	Shoes
Eldorado	120	3,000
Atlantica	40	200

when eldorado and Atlantica decide to trade, what is the minimum price acceptable to Atlantica?

a. 1 calculator = 1 shoe.

b. 10 calculators = 30 shoes.

c. 40 calculators = 3,000 shoes.

d. 1 calculator = 5 shoes.

e. 1 calculator = 15 shoes.