Consumption possibilities, during a given time period, refer to the

Alternative combinations of goods and services that a country can consume.

Assume the United States and Canada have the same amount of resources. In a given time period, the United States can produce 3 tons of steel or 300 tons of wheat. Canada can produce 4 tons of steel or 400 tons of wheat. This means that

Canada has an absolute advantage in both steel and wheat.

Goods and services purchased from international sources are

Imports

Appreciation of the dollar refers to

A fall in the dollar price of a foreign currency

The marginal revenue product of labor is equal to

The marginal physical product multiplied by the marginal revenue of the output.

Increased trade restrictions

Reduce total consumption possibilities

The amount of good A given up for good B in trade is the

Terms of trade.

The current account balance is equal to

Trade balance + unilateral transfers.

Specialization in production

Increases output.

Increased opportunities for trade increase production by

Improving efficiency through specialization.

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The opportunity cost of producing 1 ton of soybeans in the United States is

5 computers

The United States is capable of producing many goods and services that it imports, but it does not because

We can import those goods at a lower opportunity cost than if we make them ourselves

The demand for U.S. dollars in the foreign exchange market is determined by all of the following except

American demand for American products

When the exchange rate between the U.S. dollar and the Japanese yen is $1 = 100 yen, this is an indication that

It would take 100 yen to purchase $1

As more hours are worked, the marginal utility of leisure time tends to

Increase.

Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The opportunity cost of producing 1 computer in China is

1/3 of a ton of soybeans

Suppose China can produce 200 TVs or 200 DVD players. South Korea can produce either 100 TVs or 200 DVD players. In terms of TV production we can conclude that

China has a comparative advantage

The infant industry argument can be justified because

A new industry may be difficult to start in the face of existing foreign competition

The opportunity cost of working is the

Value of leisure time that must be given up

An individual's labor supply curve

Slopes upward initially, and then may bend backward

A firm should hire an additional worker as long as the wage rate is

Less than the MRP.

The elasticity of labor supply does not depend on

The demand for labor

A change in the exchange rate for a country's currency alters the prices of

Both exports and imports.

Goods and services sold to foreign buyers are

Exports

Dumping is said to occur when

Foreign producers sell their goods abroad at prices lower than those prevailing in their own countries.

The demand for labor and other factors of production typically decline in a recession because those factors

Are derived from the demand for final output, which also declines in a recession

The elasticity of labor supply measures the

Responsiveness of labor supplied to changes in the wage rate

The capital account balance is equal to the

Foreign purchases of U.S. assets minus U.S. purchases of foreign assets.

A firm's demand for labor is referred to as a derived demand because

It is derived from the demand for the product that the labor is producing

A country has a comparative advantage in a good if

It can produce a good at a lower opportunity cost relative to another country. Correct

Exports minus imports define a country's

Trade balance

Which of the following is a gain from trade?

A higher standard of living for all trading countries

Which of the following generates demand for foreign currencies?

Imports of foreign goods by firms located in the United States.

The law of diminishing returns states that, ceteris paribus, the

MPP of labor declines as more labor is employed.

The exchange rate is the

Price of one country's currency expressed in terms of another country's currency

Over a given period of time, if imports are greater than exports, the result is

A trade deficit

If we move to the right along the upward-sloping labor supply curve, we observe that the cost of labor

Increases due to the increasing opportunity cost.

When one country can produce a given amount of a good using fewer inputs than any other country

It has an absolute advantage in producing the good.

If wages are relatively high, the individual labor supply curve may

Bend backward

A summary record of a country's international economic transactions in a given time period is the

Balance of payments.

The United States has an absolute advantage in producing T-shirts, but not a comparative advantage, because

Other countries, such as China, can produce T-shirts at a lower opportunity cost relative to the United States

The number of hours that a worker is willing to work is determined by the trade-off between the increasing

Marginal utility of leisure and the decreasing marginal utility of income.

The terms of trade between two countries refer to

The amount of good A given up for good B.

Depreciation of the dollar refers to

An increase in the dollar price of foreign currency.

Which of the following generates demand for foreign currencies

Expenditures by Americans traveling abroad

The U.S. desire for foreign currency represents

A supply of U.S. dollars