ch6666

The meaning of “term of trade” is

• The price of a country’s exports divided by the price of its imports

• The amount of exports sold by a country

• The price conditions bargained for in international markets

• The quantities of imports received in free trade

• The Tariffs in place between two trading countries

A country cannot produce a mix of production with a higher value than where

• The isovalue line is tangent to the production frontier

• The isovalue line intersects the production possibility frontier

• The isovalue line is above the production possibility frontier

• The isovalue line is below the production possibility frontier

• The isovalue line is tangent with the indifference curve

Tastes of individuals are represented by

• indifference curves.

• production possibility frontiers.

• isovalue lines.

• production functions.

• the terms of trade.

If the ratio of price of cloth (PC) divided by the price of food (PF) increases in the international marketplace,

then

• the terms of trade of cloth exporters will improve.

• all countries would be better off.

• the terms of trade of food exporters will improve.

• the terms of trade of all countries will improve.

• the terms of trade of cloth exporters will worsen.

If the ratio of price of cloth (PC) divided by the price of food (PF) increases in the international marketplace,

then

• the cloth exporter will increase the quantity of cloth produced.

• the cloth exporter will increase the quantity of cloth exported.

• the food exporter will increase the quantity of food exported.

• the cloth exporter will decrease the quantity of cloth exported.

• the country would import more cloth.

If the ratio of price of cloth (PC) divided by the price of food (PF) increases in the international marketplace,

then

• world relative quantity of cloth supplied will increase.

• world relative quantity of cloth supplied and demanded will increase.

• world relative quantity of cloth supplied and demanded will decrease.

• world relative quantity of cloth demanded will decrease.

• world relative quantity of food will increase.

A country will be able to consume a combination of goods that is not attainable solely from domestic

production if

• the world terms of trade differ from its domestic relative costs.

• the country specializes in one product.

• the country avoids international trade.

• the world terms of trade equal the domestic relative costs.

• the country's domestic production value equals world relative value.

Terms of trade refers to

• the relative price at which trade occurs.

• what goods are imported.

• what goods are exported.

• the volume of trade.

• the tariffs applied to trade.

If points A and B are two locations on a country's production possibility frontier, then

• the country could produce either of the two bundles.

• consumers are indifferent between the two bundles.

• producers are indifferent between the two bundles.

• at any point in time, the country could produce both.

• both bundles must have the same relative cost.

If the economy is producing at point a on its production possibility frontier, then

• all of the country's workers are employed.

• all of the country's workers are specialized in one product.

• all of the country's capital is used for one product.

• all of its capital is used, but not efficiently.

• all of the country's exports are produced in equal amounts.