1.			Mercantilists believed:
			A)	that trade can only benefit a country at the expense of another country.
			B)	that maintaining a balance of trade deficit was best.
			C)	government should have no control over trade.
			D)	amassing large quantities of gold and silver were damaging to the health of a country.

Labor Required to make:	In the U.S.	In the R.O.W.
1 television	8 hours	4 hours
1 computer	3 hours	3 hours

2.			Referring to the table above, the opportunity cost of one television in the U.S. is:
			A)	8/3 computer.
			B)	3/8 computer.
			C)	4/3 computer.
			D)	3/4 computer.
3.			Referring to the table above, the opportunity cost of one computer in the U.S. is:
			A)	8/3 television.
			B)	3/8 television.
			C)	4/3 television.
			D)	3/4 television.
4.			Referring to the table above, the opportunity cost of one television in the rest of the world is:
			A)	8/3 computer.
			B)	3/8 computer.
			C)	4/3 computer.
			D)	3/4 computer.
5.			Referring to the table above, the opportunity cost of one computer in the rest of the world is:
			A)	8/3 television.
			B)	3/8 television.
			C)	4/3 television.
			D)	3/4 television.
6.			Referring to the table above, the rest of the world has a comparative advantage in:
			A)	televisions.
			B)	computers.
7.			Referring to the table above, the U.S. has a comparative advantage in:
			A)	televisions.
			B)	computers.
8.			Referring to the table above, which country has an absolute advantage in televisions?
			A)	U.S.
			B)	Rest of the World
9.			Referring to the table above, neither country has an absolute advantage in __________:
			A)	computers.
			B)	televisions.
10.			Which of the following statements refutes mercantilist thinking? National well-being is based on the ability to consume products (and other "goods" such as leisure and a clean environment) now and in the future. Imports are part of the expanding national consumption that a nation seeks, not an evil to be suppressed. Trade freely transacted between countries generally leads to gains for the exporting countries and losses for importing countries. The importance of national production and exports is only indirect: They provide the income to buy products to consume. Exports are not desirable on their own rather, exports are useful because they pay for imports.
			A)	(1) + (2)
			B)	(1) + (3)
			C)	(1)
			D)	(2)