Week 15 Quiz

A distributor in a neighboring country wants to carry the illustrative coffee cart's bottled cold brew. Where does this news belong in the cart's SWOT?

Select one.

• A strength, because it is good news the cart earned
• An opportunity, because it starts outside the cart
• A weakness, because the cart depends on a partner
• A threat, because it involves another country

A government announces a new tax on imported coffee beans, which the illustrative coffee cart buys from abroad. How does the cart's scan of its external environment classify this news?

Select one.

• A weakness inside the cart, because it raises the cart's costs
• A strength, because the cart can pass the cost to customers
• An opportunity, because rivals face the same tax
• A threat from a political force outside the cart

In one worker-day, illustrative East Island makes 6 baskets of fruit or 3 nets of fish, and West Island makes 4 baskets of fruit or 1 net of fish. Which statement about absolute advantage is accurate?

Select one.

• East has the absolute advantage in both goods
• West has the absolute advantage in fruit only
• Each island has the absolute advantage in one good
• Neither island has an absolute advantage

In one worker-day, illustrative East Island makes 6 baskets of fruit or 3 nets of fish. What is East's opportunity cost of one net of fish, measured in fruit?

Select one.

• 0.5 fruit
• 3 fruit
• 2 fruit
• 4 fruit

On the illustrative two-island table, one basket of fruit costs East 0.5 fish and costs West 0.25 fish. Which island has the comparative advantage in fruit, and why?

Select one.

• East, because it makes more fruit per worker-day
• West, because it gives up less fish for each fruit
• East, because it gives up more fish for each fruit
• Neither, because East has the absolute advantage

On the illustrative two-island table, the world makes 50 fruit and 20 fish when each island splits its 10 worker-days evenly. East then puts 8 days on fish and 2 on fruit, West puts all 10 days on fruit, and East trades 6 fish for 18 fruit. What does the world have after trade?

Select one.

• 50 fruit and 20 fish, the same as before
• 52 fruit and 18 fish
• 40 fruit and 24 fish
• 52 fruit and 24 fish

A fish costs illustrative East Island 2 fruit to make and costs West Island 4 fruit. At which swap rate would trading fish for fruit leave both islands better off?

Select one.

• 3 fruit per fish
• 1 fruit per fish
• 5 fruit per fish
• 2 fruit per fish

An illustrative bike shop imports parts from a maker in another country, and a tariff applies when the parts reach a U.S. port. Who owes the duty to the United States at the border?

Select one.

• The foreign maker that sold the parts
• The shop's customers, at the register
• The bike shop, as the importer of record
• The government of the maker's country

True or false: when a country's imports are larger than its exports for a year, the resulting trade deficit is a debt that the country owes to other countries.

True or false.

• True
• False

The illustrative coffee cart's owner wants to sell cold brew abroad while putting as little money at risk as possible, and accepts having little control over how stores shelve it. Which rung of the entry ladder fits best?

Select one.

• Direct foreign investment in a bottling plant abroad
• Exporting through a distributor across the border
• A joint venture with a foreign partner
• Contract manufacturing plus owned outlets abroad