These questions help you review the Introduction and the Ricardian model. For each statement, determine whether it's T/F, and then explain why.

Questions 1-2 are based on the production of the iPhone. Assume that China exports the iPhone to the U.S. In addition, China produces only 1 iPhone, and the U.S. imports only 1 iPhone. Sum of Its Parts The iPhone is assembled in China with parts from many countries, but when it comes to calculating the U.S. trade deficit the full value is attributed to China 34% JAPAN 17% GERMANY 13% SOUTH 6% ULS 3.6% CHINA 27% OTHERS Value of iphone 3G components and labor $178.96 "Estimates don't total 100% do to rounding Source: Rassweiler 1. China's trade-to-GDP ratio exceeds 20. 2. The value of U.S. imports from Japan is $60.84