Question

Question 204 pts

It seems evident that countries would have an advantage in producing those goods that use relatively large amounts of their most abundant factor of production.

True

False

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Question 214 pts

The data in the table below assumes that with the same quantity of resources, both Australia and Philippines produces food and computers. Australia can make 1,000 computers or 2,000 units of food in a day, and the Philippines can make 200 computers or 1,200 units of food in a day.
Table 20.2

Computers Food Country Australia 1,000 2,000 Philippines 200 1,200

According to Table 20.2, what is the opportunity cost of 1 computer in the Philippines?

2 units of food

One-sixth of a unit of food

Three-fifths of a unit of food

1 unit of food

6 units of food

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Question 224 pts

The Dutch Disease had occurred in Netherlands because:

the price of the primary commodities declined in the international market.

the currency of Netherlands depreciated in the international market.

the demand for natural gas exports from Netherlands increased substantially.

the price of the commodities manufactured by Netherlands declined in the international market.

the Netherlands government had borrowed heavily from the World Bank to meet its Balance of Payment deficits.

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Question 234 pts

Workers in industrial countries earn much higher wages than workers in developing countries because:

the marginal productivity of labor is high in the industrial economies.

the industrial countries are labor rich and capital poor economies.

the industrial countries lack a steady supply of unskilled laborers.

the marginal productivity of labor is low in the industrial economies.

the industrial countries produce labor intensive goods.

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Question 244 pts

What is known as the Dutch disease?

A sudden and unexpected devaluation of a currency as a consequence of policy controls

A deficit in the balance of payments of the economy that arises due to a sudden appreciation of the domestic currency

The problem that arises when a government cannot meet its foreign debts

The problem that arises when high imports force an economy to borrow from external sources

The phenomenon of a boom in one industry causing declines in the rest of the economy

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Question 254 pts

The most heavily traded category of goods in the world is:

chemicals.

iron and steel.

textiles.

office and telecom equipment.

crude petroleum.

Answer 1

204. TRUE

Countries are able to produce more of those goods which uses the factor of production which they are abundant in. This allows them to produce greater quantities and hence, absolute advantage.

214. 6 units of food

Opportunity cost of 1 computer in the Philippines = 1200 /200 = 6 Food.  

224. the demand for natural gas exports from Netherlands increased substantially

234. the marginal productivity of labor is high in the industrial economies.

244. The phenomenon of a boom in one industry causing declines in the rest of the economy.

254. Crude Petroleum

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