8) A country will be able to consume a combination of goods that is not attainable solely fromdomestic production ifA) the country specializes in one product.B) the world terms of trade equal the domestic relative costs.C) the country's domestic production value equals world relative value.D) the world terms of trade differ from its domestic relative costs.E) the country avoids international trade.

A country that imposes a tariff on imported goods is most likely to experience which benefit?A.Working conditions for domestic workers will improve relative to other countries.B.A wider variety of imported products will become available to consumers.C.The country will begin producing goods more efficiently than other countries.D.Goods produced by domestic companies will be cheaper than competing imports.

A product is produced in a monopolistically competitive industry with scale economies. If thisindustry exists in two countries, and these two countries engage in trade with each other, then wewould expectA) the country with a relative abundance of the factor of production in which production of theproduct is intensive will export this product.B) the countries will trade only with other nations they are not in competition with.C) the country in which the price of the product is lower will export the product.D) neither country will export this product since there is no comparative advantage.E) each country will export different varieties of the product to the other.

8. In a two product two country world, international trade can lead to increases inA) total production of both products but not consumer welfare in both countries.B) prices of both goods in both countries.C) consumer welfare only if output of both products is increased.D) output of both products and consumer welfare in both countries.E) consumer welfare in both countries but not total production of both products.

2. Assume Ricardian world. With no trade, if a country consumes two goods, it implies thatA) the price of two goods are the same.B) the relative price of one good is the same as the opportunity costs of that good.C) the relative price of one good is the same as the opportunity costs of the other good.D) A good which is consumed more is cheaper than the other good.

Countries often benefit from specializing in a certain product because specialization:A.allows them to focus on making one product as efficiently as possible.B.decreases the price of natural resources needed to make a product.C.prevents other countries from trying to make similar products.D.ensures that they will not have to rely on trade for essential products.