1. An increase in the imports of clothing into the U.S from India wills benefits the____________ & hurt the___________. A) U.S. clothing producers; Indian clothing producers
B) Indian consumers; Indian clothing producers
C) U.S consumers; Indian clothing producers
D) U.S consumers; U.S clothing produces
2. Suppose Country A, a labor-abundant country, produces only wheat & cloth. The following equations illustrate the prices & costs of wheat and cloth in the country, where the numbers indicate the amounts of labor and land needed to produce a unite of wheat and cloth. ‘W’ is the wage rate and ‘r’ is the rental rate of land. Price of wheat = 1w +2r
Price of cloth = 2w + 1r
A) Labor is used relatively intensively in the production of cloth. B) The inputs are used in the same proportion in producing both the commodities C) The land to labor ratio in the production of cloth is higher than that in the production of wheat. D) The opportunity cost of producing cloth is higher than the opportunity cost of producing wheat in company A
3. Table 3.3
Productivity| In the U.K| In the rest of the world|
Umbrellas per labor hour| 0.25| 1|
Bushels per labor hour| 0.3| 0.65|
The table given above shows the number of umbrellas and bushels of corn produced in the U.K & the rest of the world per labor hour.
Refer to Table 3.3. The Rest of the world has an absolute advantage in the production of______________. A) Both the goods
B) Neither corn nor umbrella
C) Only Umbrella
D) Only Corn
4. Which of the following is NOT true of a nation’s production-possibility curve?
A) The production-possibility course curve shows all combinations of amounts of different B) Points inside the production-possibility curve are feasible, but may represent unemployment of some of the economy’s resources. C) Points outside the production-possibility curve are feasible production points given the...