Suppose the nation of Arcadia produces only two goods, teapots and surfboards. If Arcadia produces only teapots, it can make 80 per day. If Arcadia produces only surfboards, it can make 30 per day. What is the opportunity cost of 1 teapot in Arcadia?

A. 3/8 of a surfboard

B. 8/3 surfboards

C. 30 surfboards

D. 80 surfboards

As a whole, nations are better off after trade and specialization because __________ .

A. nations can consume along their consumption possibilities curve, which is outside of their production possibilities curve

B. nations can consume along their consumption possibilities curve, which is inside of their production possibilities curve

C. nations can consume along their production possibilities curve, which is outside of their consumption possibilities curve

D. nations experience an inward shift of their production possibilities curve Suppose there are only two nations, Atlantis and Pacifica, and only two goods, surfboards and kayaks. If Atlantis produces only surfboards, it can make 50 per day. If Atlantis produces only kayaks, it can make 75 per day. If Pacifica produces only surfboards, it can make 75 per day. If Pacifica produces only kayaks, it can make 75 per day. After trade begins, __________ will specialize in the production of surfboards and __________ will specialize in the production of kayaks.

A. Atlantis; Atlantis

B. Pacifica; Pacifica

C. Atlantis; Pacifica

D. Pacifica; Atlantis

Which of the following statements is true?

A. Free trade will benefit all workers in a nation equally.

B. As a result of specialization some workers will be displaced and harmed in the short run by free trade.

C. Free trade leads to lower wages for all workers in both nations.

D. Specialization will result in a decline in an industry, and none of those workers will be able to find other jobs. Suppose Panama produces only two goods, bananas and hats. If Panama has a comparative advantage in bananas, a move toward free trade will __________ .

A. harm hat workers, benefit banana workers, but benefit the nation as a whole

B. harm hat workers, harm banana workers, but benefit the nation as a whole

C. benefit hat workers, harm banana workers, but harm the nation as a whole

D. benefit hat workers, harm banana workers, but benefit the nation as a whole An import ban results in __________ .

A. a decrease in the supply of the product

B. an increase in the product's price

C. a decrease in the quantity of the product bought and sold

D. all of the above

Import bans, import quotas, voluntary export restraints, and tariffs on goods all _______________.

a. Increase equilibrium quantity and prices b.decrease equilibrium quantity and prices c. Increase equilibrium quantities but decrease prices

d. decrease equilibrium quantities but increase prices