Entry Exam Category: High School Equivalency Exams
Course: HiSET
Exam: HiSET Social Studies Practice Test
Practice Question
Extract
Trade and Opportunity Costs
This passage and table describe the opportunity costs faced by two countries.
1 The countries of Grand Coast and Toland are trading partners. The two main goods
traded are timber and fish. Every year the ministers of trade from each country
attend an international conference to discuss issues related to foreign trade and
decide how each country should specialize. The table provides economic data for
one year.
This passage and table describe the opportunity costs faced by two countries.
1 The countries of Grand Coast and Toland are trading partners. The two main goods
traded are timber and fish. Every year the ministers of trade from each country
attend an international conference to discuss issues related to foreign trade and
decide how each country should specialize. The table provides economic data for
one year.
Which policy would be most effective to increase Grand Coast's comparative advantage over Toland?
Answer Choices
- A: Raise taxes on factories and mills
- B: Encourage more workers to pursue fishing
- C: Maintain spending on infrastructure projects
- D: Improve technology used to produce timber
Correct Answer: B
Rationale: To increase comparative advantage in fish (inferred from Q41), Grand Coast should focus on fishing, encouraging more workers to pursue it, increasing efficiency and output.