In autarky the relative price of wine, in terms of beer, in Country B is ? A. 1W = 3BB. 1W = 4 1/2B C. 1W = 5B D. 1W = 6B

Country A has an absolute advantage in ? A. Beer B. Wine C. Both productsD. neither products

If countries were to trade along the lines of comparative advantage ? A. A would export X to BB. A would export Y to B C. Neither country would want to trade D. None of the above

Country B has an absolute advantage in ? A. Product X B. Product Y C. Neither X nor Y D. Both X and Y

Comparative advantage is determined by ? A. actual differences in labor productivity between countriesB. relative differences in labor productivity between countries C. Both (a) and (b) D. Neither (a) nor (b)

In the classical model of Ricardo, the direction of trade is determined by ? A. Absolute advantageB. Comparative advantage C. Physical advantage D. Which way the wind blows

The gains from international trade are closely related to ? A. The labor theory of valueB. How much the autarky price differs from international terms of trade change C. The fact that a country must lose from trade D. All…

Mercantilism ? A. Is the philosophy of free international trade?B. Was a system of export promotion and barriers to imports practiced by governments? C. Was praised by Adam Smith in the Wealth of Nations D. Both (a) and (c)

If the international terms of trade settle at a level that is between each country’s opportunity cost ? A. There is no basis for gainful trade for either countryB. Both countries gain from trade C. Only one country gains from…

The earliest statement of the principle of comparative advantage is associated with ? A. Adam SmithB. David Ricardo C. Eli Heckscher D. Berti IOhlin