Exam 8: International Trade

Use the following to answer question: -(Figure: The Market for Tea in Sri Lanka)Use Figure: The Market for Tea in Sri Lanka.In autarky,the price is P₁.When the economy is opened to trade,the price rises to P_W and the change in total surplus is:

If the opportunity cost of producing either of two goods in question is constant,the production possibility frontier is:

A tax on imported goods or services is a:

Use the following to answer question: -(Figure: The Market for Beats by Dre)Use Figure: The Market for Beats by Dre.If the world price equals $100 and there is free trade,producer surplus:

Which item is an example of an import quota?

Although U.S.exports and imports have grown substantially in absolute terms since the 1960s,the share of exports and imports in total output has fallen significantly over the past few decades.

Many countries engage in trade protection by imposing import tariffs or quotas for at least some goods.This is because:

If the _____ differ(s)between two countries,this suggests the possibility for mutually advantageous trade.

Use the following to answer question: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Indonesia specializes completely in the production of the good of its comparative advantage,it will produce:

The United States can produce 30 computers for every car it produces,and Japan can produce 15 computers for every car it produces.Based on this information,which statement is INCORRECT?

Mexico has an abundance of unskilled labor and the United States has an abundance of skilled labor.The Heckscher-Ohlin model implies that trade between the United States and Mexico will lead to a decrease in the wages of unskilled labor in the United States and an increase in the wages of skilled labor in the United States.

A blockade at the border between the United States and Canada prevents the entry of all lumber products to the United States from Canada.This blockade will:

Taken collectively,people in nations that engage in international trade are NOT likely to:

Honduras exports clothing to the United States,and the United States exports bulldozers to Honduras.Proponents of the Heckscher-Ohlin model would explain this pattern of trade by stating that:

Use the following to answer question: -(Figure: The Production Possibilities for Two Countries)Use Figure: The Production Possibilities for Two Countries.If Indonesia and Malaysia trade 1 microchip for 1 tire,the most that Indonesia can consume is _____ microchips and _____ tires,while the most that Malaysia can consume is _____ microchips and _____ tires.

(Table: The Production Possibilities for Cars and Leather Boots)Use Table: The Production Possibilities for Cars and Leather Boots.Given the opportunity costs of production:

Import protections are often imposed because:

Use the following to answer question: -(Figure: The Market for Calculators)Use Figure: The Market for Calculators.Assume that S and D represent the domestic demand and supply of calculators.The world price,P_W,equals $100.When the economy moves from autarky,under which the price is $150,to free trade,consumer surplus rises by area _____ and producer surplus falls by _____.

If a country imposes a tariff on imported shoes,we expect the domestic price of shoes to _____ and the quantity of shoes consumed in the domestic market to _____.

Sri Lanka's comparative advantage over the United States in textiles can be explained by its: