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Ag Econ > Exam #4 (WS 12) > Flashcards

Exam #4 (WS 12) Flashcards

1
Q

Adam Smith suggested the idea of:

a. absolute advantage
b. comparative advantage
c. law of diminishing returns
d. law of demand

A

A

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2
Q

Adam Smith would favor:

a. self-sufficiency
b. each nation producing all goods for the citizens
c. specialization and gains from trade
d. economic independence for each region

A

C

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3
Q

Absolute advantage is:

a. lowest opportunity costs
b. political power
c. lowest production costs
d. lowest variable costs

A

C

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4
Q

Comparative advantage is:

a. lowest opportunity costs
b. political power
c. lowest production costs
d. lowest variable costs

A

A

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5
Q

The trade of food across international borders causes:

a. mutual gain for both nations
b. specialization and a greater level of output
c. lower production costs
d. all of the other answers

A

D

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6
Q

Free trade:

a. is good for exporters
b. is good for importers
c. neither A nor B
d. both A and B

A

D

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7
Q

California agriculture is the most productive in the world. Therefore:

a. California should produce all food products
b. California should produce food products that it has an absolute advantage in
c. California should produce food products that it has a comparative advantage in
d. California should specialize in local food

A

C

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8
Q

Local food is a good example of:

a. solid economic thinking
b. a liberal agenda
c. a movement that runs counter to economic principles
d. providing more money to the US farm sector

A

C

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9
Q

Trade occurs due to:

a. arbitrage
b. differences in climate and productivity
c. comparative advantage
d. all of the other answers

A

D

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10
Q

If two nations were identical:

a. both nations would benefit from trade
b. trade could result in higher income for everyone
c. no trade would take place
d. comparative advantage would result in specialization and trade

A

C

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11
Q

Trade will have the largest impact when:

a. differences between nations are smallest
b. differences between nations eliminated
c. differences between nations are largest
d. differences between nations do not exist

A

C

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12
Q

Agriculture trade with the US is most likely to occur:

a. with nations in tropical climates
b. with nations with climates similar to the US
c. with nations that are furthest away
d. with nations that produce food and feed grains

A

A

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13
Q

Workers with good people skills will benefit by working with:

a. co-workers with similar skills
b. co-workers with different skills
c. themselves
d. their superior

A

B

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14
Q

The theory of absolute advantage is due to:

a. Adam Smith
b. Alfred Marshall
c. David Ricardo
d. Ronald Coase

A

A

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15
Q

The theory of comparative advantage is due to:

a. Adam Smith
b. Alfred Marshall
c. David Ricardo
d. Ronald Coase

A

C

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16
Q

Most politicians in the US favor:

a. free trade
b. regulated trade
c. self-sufficiency
d. free markets, but not free trade

A

A

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17
Q

Economists recommend:

a. self-sufficiency in oil and energy
b. self-sufficiency in food production
c. specialization and trade in energy but not food
d. specialization and trade in both energy and food

A

D

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18
Q

When working with a group, there are advantages to:

a. working with people of similar skills
b. working with people of different skills
c. dividing up the work and working alone
d. doing all of the work as a group

A

B

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19
Q

When working with a group, there are advantages to:

a. dividing up the work based on absolute advantage
b. dividing up the work based on comparative advantage
c. doing all of the work as a group
d. dividing up the work alphabetically

A

B

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20
Q

In most group work, the best results will occur:

a. by letting the smartest individual do all the work
b. by letting each individual work on their comparative advantage
c. by letting each individual work on what they like best
d. by letting each individual work on what they have the most difficulty with

A

B

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21
Q

Specialization and trade occurs in:

a. market economies
b. command economies
c. mixed economies
d. short run economies

A

C

22
Q

Suppose that Mexico has an absolute advantage in all agricultural products, due to favorable climate and low labor costs:

a. the US will not benefit from trade with Mexico
b. the US will desire to trade with Mexico, but Mexico would not gain from trade
c. Mexico will desire to trade with the US, but the US would not gain from trade
d. the US could benefit from trade with Mexico

A

D

23
Q

Agricultural goods will always be produced:

a. in warmer climates
b. intemperate climates
c. in all climates, based on comparative advantage
d. in all climates, based on a desire for self-sufficiency in food

A

C

24
Q

California has an absolute advantage in almost all agriculture products:

a. other states will purchase all food from California
b. other states will purchase food that has a comparative advantage from California
c. other states will be self-sufficient in food
d. California will continue to produce all food

A

B

25
Q

Goods will flow:

a. from areas of high cost to areas of low cost
b. from areas of low cost to areas of high cost
c. to areas where income is highest
d. to areas where income is lowest

A

B

26
Q

Free trade is most beneficial:

a. when all trades are voluntary
b. when all governments directs the flow of goods and services
c. when consumers buy the highest quality goods
d. when producers produce goods that they enjoy producing

A

A

27
Q

Specialization and gains from trade result in:

a. greed and crime
b. equal distribution of income
c. inequality and poverty
d. economic growth due to efficiency

A

D

28
Q

The movement to buy local food is:

a. great economic advice, in line with comparative advantage
b. good economic advice for increasing the standard of living
c. counter to economic principles of comparative advantage
d. good if you live in North Dakota

A

C

29
Q

The US is currently:

a. self-sufficient in food
b. a major importer of food
c. a major exporter of food
d. a major importer and exporter of food

A

D

30
Q

Cattle production is most likely to occur in:

a. urban states, to be close to consumers
b. rural states, to take advantage of comparative advantage
c. all states, to take advantage of local food
d. no states, cattle are imported

A

B

31
Q

An economist suggests:

a. doing all home repairs yourself, to same money
b. hiring an outside repair expert for all repairs
c. basing home repair decisions on comparative advantage
d. renting so that the landlord must do home repairs

A

C

32
Q

The US has made a transition from:

a. agriculture to manufacturing to services
b. manufacturing to agriculture to services
c. services to manufacturing to agriculture
d. services to agriculture to manufacturing

A

A

33
Q

The US has a comparative advantage in:

a. manufacturing
b. tropical foods such as coffee and bananas
c. services
d. steel and cars

A

C

34
Q

A comparative advantage is:

a. the best strategy
b. long experience in production of a good
c. lowest costs of production of a good
d. lowest opportunity cost of producing a good

A

D

35
Q

A nation with no absolute advantage:

a. will invest in finding an absolute advantage
b. will have continuing decreases in the standard of living
c. will specialize in goods with a comparative advantage
d. will not trade with other nations

A

C

36
Q

Mexico is likely to specialize in:

a. goods with labor-intensive production processes
b. goods with capital-intensive production processes
c. goods with management-intensive production processes
d. goods that consumers in Mexico desire to purchase

A

A

37
Q

The US is likely to specialize in:

a. goods with labor-intensive production processes
b. goods with capital-intensive production processes
c. goods with management-intensive production processes
d. goods that consumers in the US desire to purchase

A

C

38
Q

Which nations benefit from international trade?

a. small nations
b. large nations
c. both A and B
d. neither A nor B

A

C

39
Q

Which nations benefit the most from international trade?

a. agricultural nations
b. industrial nations
c. high-income nations
d. not enough information to answer

A

D

40
Q

Coffee consumption has increased in the US, so we expect to see:

a. increased production of coffee in the US
b. increased imports of coffee in the US
c. increased exports of coffee in the US
d. not enough information to answer

A

B

41
Q

Large nations such as the US, Russia, Brazil, and China should:

a. strive for self-sufficiency
b. strive to maximize exports
c. strive to maximize imports
d. strive to promote free trade, giving buyers and sellers the most options

A

D

42
Q

The US would benefit most from:

a. never import green beans
b. import all green beans, to free up land and resources for other goods
c. export green beans to earn foreign exchange
d. allow free markets and free trade to provide consumers with what is best for them

A

D

43
Q

The US would benefit most from:

a. exporting food and feed grains, and meat products
b. importing tropical fruit and vegetables
c. both A and B
d. neither A nor B

A

C

44
Q

In recent years, the US has expanded imports from China, resulting in:

a. unemployment and lower incomes
b. inflation
c. major economic disruptions
d. higher levels of income and greater consumption opportunities

A

D

45
Q

Walmart continues to offer goods at lower cost to US consumers, resulting in:

a. lower incomes due to job loss
b. major loss of business in rural areas
c. higher levels of consumption
d. inefficient outcomes due to greed

A

C

46
Q

The president of a major company should always:

a. do as much as he or she can to be a good role model
b. make as many decisions as possible, so the firm does not need to hire more leaders
c. delegate decisions to workers who have the best information to make the decision
d. base decisions on advice from other leaders

A

C

47
Q

Suppose that the US has an absolute advantage in the production of software.

a. the US will never import software
b. the US will never export software
c. the US will never not trade software with other nations
d. not enough information to answer

A

D

48
Q

The US makes international trades based on:

a. relative prices
b. government studies that show consumer needs
c. diplomacy efforts with trading partners
d. advice from professors

A

A

49
Q

International trade:

a. makes both trading partners better off
b. makes one trading partner better off at the expense of the other
c. results in bad outcomes when there are shortages
d. is good for consumer goods, but we should not rely on other nations for our food supply

A

A

50
Q

Globalization is likely to increase due to:

a. technological change in communication
b. income growth in world economies
c. both A and B
d. neither A nor B

A

C

Ag Econ (10 decks)

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