Choose the correct answer.

1.) if there were free trade between the two countries, which one of the following statement would be true?

a. only the US will gain from free trade

b. The US would specialize in the production of both chips and soy beans

c. the US will export chips to Philippines

d. Philippines will specialize in the production of chips.

2.) in trade between Philippines and the US,

a. Philippines has an absolute advantage in producing soybeans.

b. US has a comparative advantage in producing soybeans.

c. Philippines has a comparative advantage in producing soy beans.

d. US has a comparative advantage in producing chips.

3.) Which one of the following statements concerning international trade and protection is true?

a. Protection is necessary to keep money in the country.

b. When two nations trade, one must gain while the other must lose.

c. A country cannot compete with one another whose labor costs are lower.

d. A country's imports raise its living standards.

4.) which of the following is a tariff?

a. licensing requirements

b. consumption taxes on import goods

c. unreasonable standards pertaining to product quality and safety

d. domestic content rule

5.) One of the major consequences of international trade between nations is

a. higher prices for consumer

b. a decreased variety of consumer products.

c. the possibility for total world output to increase.

d. reduced competition for business.