Exam 18: International Trade and Comparative Advantage

If two countries each are currently producing two goods,and each begins to specialize in the good in which it has a comparative advantage,what will happen to total (world)output?

The two primary reasons to adopt measures to restrict trade are that

From Table 22-1,the opportunity cost of one bushel of wheat in Great Britain is

Trade occurs only when a country has an absolute advantage and not just a comparative advantage over another country.

The U.S.Constitution prevents tariffs on trade between the individual states.

Figure 22-8 -Table 22-4 presents the demand and supply schedules for television sets in Japan and the United States.If the United States and Japan trade with each other,what will happen to the output of television sets in the United States?

The basic concept behind strategic trade policy is that free trade is the best policy to pursue,but some countries don't play by those rules.Therefore,

Cheap labor is the source of comparative advantages.

The trade philosophy of the Clinton administration is best characterized as

Comparative advantage is the rule that ordinarily prevents a nation from independently producing all of the goods it requires.

Both tariffs and quotas will restrict supplies coming into the country from abroad.

If a nation imposes a tariff on imports,the portion of the tax paid by citizens depends upon

Something other than exploiting cheap foreign labor must be driving international trade.

Mercantilist policy is to do everything it can to promote exports and to discourage imports.

Absolute advantage states that a country has an advantage over another if it can produce a good with fewer resources.

What would be the output combination for two products A and B on the production possibility frontier,if a country uses its entire resources for producing A?

Figure 22-8 -Table 22-4 presents the demand and supply schedules for television sets in Japan and the United States.If Japan and the United States trade with each other,what will be the equilibrium price in the world market for television sets?

An example of a quota that protects an American industry is the quota on

Figure 22-3 -In Figure 22-3,the solid lines represent the respective production possibilities curves for the United States and Mexico.Which graphs show the correct consumption possibilities curves (dashed lines)after an agreement is reached to trade 1 unit of wheat for 1 unit of petroleum?

If Japan imposes a quota on imports of rice,the effect will be