Question

26-	When economists say that an individual or country has the comparative advantage in the production of a good, it means that they:
	A)	can produce more of the good than anyone else.
	B)	are the lowest-opportunity-cost producer of the good.
	C)	are the highest-opportunity-cost producer of the good.
	D)	are operating on their production possibilities frontier.

27-	A country produces and consumes eight units of sugar cane costing $50 per unit and two iPods that cost $200 each. After specialization and trade, that country consumes eight units of sugar cane and four iPods. With 24 units of labor, what are wages in this country?
	A)	$33.33 without trade and $50 with trade
	B)	$50 without trade and $75 with trade
	C)	$50 without trade and $33.33 with trade
	D)	$33.33 without trade and $75 with trade
28-	According to the textbook, globalization:
	A)	never took place.
	B)	began as far back as the Roman Empire.
	C)	began in the twenty-first century.
	D)	occurred only during the Dark Ages.
29-	Globalization is best described as:
	A)	a new process.
	B)	an old process that has consistently grown.
	C)	an old process that has grown intermittently.
	D)	an old process that has declined over time.
30.	The recent pace of globalization has been increased through:
	A)	declining transportation costs.
	B)	increased speed of communication.
	C)	the integration of world markets.
	D)	each of these developments.

Answer 1

1.
B)
are the lowest-opportunity-cost producer of the good.
The trade on basis of comparative advantage is based on the law of opportunity cost.
2.
A)$33.33 without trade and $50 with trade
Before Trade
8*50+2*200=800
wages=800/24=33.33
After Trade
8*50+4*200=1200
wages=1200/24=50
3.
B)began as far back as the Roman Empire.
Globalization can be traced back to the Roman empire.
4.
C)an old process that has grown intermittently.
Globalization has had its rise and falls throughout time.