Week 13 · Quiz

Week 13 — Quiz · International Trade & Comparative Advantage

Principles of Macroeconomics · ECON 2 Fall 2026 · Prof. Ashford Fictional sample

Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Objective 8 · 10 questions · 10 points · closed to AI · one attempt
Auto-graded (Classic QTI): see F-quiz-week-13-qti.xml for the Canvas import. Every numeric answer is pre-computed; every trade/advantage claim is verified.

The questions (human-readable; answer key below)

Q1. Comparative advantage is best defined as —
A) Producing more of a good than another country, per unit of input B) Having a lower opportunity cost of producing a good than another country C) Being the only country capable of producing a good at all D) Having a larger total economy than the trading partner

Q2. Southport can produce more wheat per worker-day than Northland, and the two countries tie on cloth. A policymaker argues, "Southport is at least as productive at everything, so Southport should produce both goods itself and never trade." What is the flaw in this reasoning?
A) There is no flaw — the more productive country should always produce everything B) The argument confuses absolute advantage (who produces more) with comparative advantage (who gives up less); Northland may still hold the comparative advantage in cloth even though Southport ties or leads in raw output C) The argument is correct only if the two countries use different currencies D) Trade is never beneficial unless one country has an absolute advantage in nothing

Q3. Eastvale produces 8 wheat OR 4 cloth per worker-day. What is Eastvale's opportunity cost of producing 1 unit of cloth, stated in wheat?
A) 0.5 wheat (this flips the ratio — it is actually the cost of 1 wheat, in cloth) B) 2 wheat C) 4 wheat D) 8 wheat

Q4. Eastvale produces 8 wheat OR 4 cloth per worker-day (opportunity cost of 1 cloth = 2 wheat). Westhaven produces 9 wheat OR 3 cloth per worker-day (opportunity cost of 1 cloth = 3 wheat). Which country should specialize in cloth?
A) Westhaven, because it produces more wheat overall B) Eastvale, because its opportunity cost of cloth (2 wheat) is lower than Westhaven's (3 wheat) C) Neither — specialization only matters if one country has the absolute advantage in both goods D) Westhaven, because 3 is a bigger number than 2

Q5. (True/False) A country can hold zero absolute advantage in either good and still hold the comparative advantage in one of them. → True

Q6. Northland's own opportunity cost of 1 cloth is 2 wheat; Southport's own opportunity cost of 1 cloth is 3 wheat. Which of the following terms of trade falls in the mutually beneficial range for both countries?
A) 1.5 wheat per cloth B) 2.5 wheat per cloth C) 3.5 wheat per cloth D) 4 wheat per cloth

Q7. A fictional economy exports (X) $300 million and imports (M) $350 million this quarter. What is net exports (NX), and what does it represent?
A) NX = $50 million; a trade surplus B) NX = −$50 million; a trade deficit C) NX = $650 million; total trade volume D) NX cannot be computed without a tariff rate

Q8. Economists who emphasize the gains-from-trade case CLAIM that —
A) Every individual worker in an import-competing industry benefits equally from trade B) Specialization according to comparative advantage raises a country's total available output, and consumers gain access to more goods at lower prices C) Tariffs are illegal under all circumstances D) A trade deficit always signals economic decline

Q9. (Select all that apply.) Which statements are CONSISTENT with the idea that a trade deficit is not automatically a sign a country is "losing" economically?
☑ A) A trade deficit can occur alongside strong domestic consumer demand pulling in more imports ☑ B) A trade deficit can coincide with foreign investment flowing into the country ☐ C) A negative NX by itself proves a country's economy is in decline ☑ D) Evaluating whether a trade deficit is a problem requires more context than the NX number alone

Q10. (Matching) Absolute advantage → Producing more of a good per unit of input than another producer; Comparative advantage → Having a lower opportunity cost of producing a good than another producer; Terms of trade → The ratio at which two goods actually trade between countries; Net exports (NX) → Exports minus imports.

Answer key & feedback (instructor)

Q	Type	Answer	Feedback (the idea)
1	MC	B	Comparative advantage = the LOWER opportunity cost, not the bigger output number.
2	MC	B	The classic trap: "better at everything" (absolute advantage) does not determine who should specialize — opportunity cost (comparative advantage) does, and it can point to the OTHER country.
3	MC	B	OC of 1 cloth = wheat given up ÷ cloth gained = 8 ÷ 4 = 2 wheat. Distractor A (0.5) flips the ratio — that's actually the OC of 1 wheat (4÷8), stated in cloth.
4	MC	B	Compare opportunity costs directly: 2 wheat (Eastvale) < 3 wheat (Westhaven), so Eastvale gives up less to make cloth — Eastvale specializes in cloth.
5	TF	True	Because opportunity costs of the two goods are mirror images of each other, a country with NO absolute advantage anywhere still has the comparative advantage in whichever good it gives up the least to produce.
6	MC	B	The mutually beneficial range sits strictly BETWEEN the two countries' own opportunity costs (2 and 3 wheat per cloth here) — 2.5 lands inside that band; 1.5 and 4 fall outside it, and 3.5 also falls outside.
7	MC	B	NX = X − M = 300 − 350 = −$50 million → a trade deficit (imports exceeded exports).
8	MC	B	This tests what the gains-from-trade POSITION claims (not a verdict): higher total output + more consumer choice at lower prices — the well-established positive result of specialization.
9	MA	A, B, D	A trade deficit is a fact about flows; it can coexist with strong demand or inbound investment, and judging it needs context beyond the NX number alone. C asserts a verdict the data alone can't support.
10	Match	as above	Distinguishes absolute advantage (raw output) from comparative advantage (opportunity cost) — the week's central distinction — plus the two trade-balance/terms-of-trade terms.

Quantitative gate: PASS — every numeric answer re-computed: Q3 8÷4 = 2 wheat (flipped-ratio distractor 4÷8 = 0.5 correctly rejected); Q4 Eastvale OC 8÷4=2 < Westhaven OC 9÷3=3; Q6 the range (2, 3) correctly bounds 2.5 and excludes 1.5, 3.5, 4; Q7 300−350 = −50; Q9 NX-context reasoning verified against the NUMBERS_PACK canon.

Graph-logic check: PASS — every comparative-advantage/trade claim verified against the NUMBERS_PACK canon: comparative advantage (opportunity cost) is correctly distinguished from absolute advantage (raw output) in Q1/Q2/Q10; the "who should specialize" rule (lower opportunity cost wins) applied correctly in Q4; the mutually-beneficial-range logic (strictly between the two countries' own costs) applied correctly in Q6; NX sign and deficit/surplus labeling correct in Q7; the trade-deficit-≠-losing claim tested as what a position/context requires (Q9), never asserted as a settled verdict.

Quality gate (self-checked): every single-answer item has exactly one correct option; distractors target the named traps (CA vs. AA, flipped opportunity-cost ratio, terms-of-trade outside the mutually beneficial range, treating a deficit as an automatic verdict). No free numeric entry; no essay.

This is the human-readable quiz with its vetted answer key and rationale. The import-ready Classic-QTI version (F-quiz-week-13-qti.xml) ships inside the course's .imscc package — it lands in the Canvas gradebook on import.

~ Prof. Ashford's edition · Fall 2026 · built with thecoursemaker.com