Exam 20: International Trade, Comparative Advantage, and Protectionism

Which of the following can be considered a free-trade zone?

Since 1980, most nation shave increased tariff rates.

The quantity and quality of a country's labor, land, and natural resources are that country's factor endowments.

An argument in favor of free trade is that trade barriers force consumers to pay higher prices for protected products than they would otherwise pay.

Refer to the information provided in Figure 20.3 below to answer the question(s) that follow. Figure 20.3 -Refer to Figure 20.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. If shoes are a normal good and income in this country rises, then we would expect

According to ________, a country should specialize and export goods with the lowest opportunity cost.

Refer to the information provided in Table 20.5 below to answer the question(s) that follow. Cashews are measured in bushels and tea is measured in pounds (lbs.) Table 20.5 $\quad$$\quad$$\quad$$\quad$$\text { India}$$\quad$$\quad$$\quad$$\quad$ $\quad$$\text { Vietnam }$ Cashews Tea Cashews Tea 0 600 0 600 20 500 20 450 40 400 40 300 60 300 60 150 80 200 80 0 100 100 - - 120 0 - - -Refer to Table 20.5. Which terms of trade benefits both countries?

________ looks to relative factor endowments to explain trade flows.

Refer to the information provided in Figure 20.1 below to answer the question(s) that follow. Figure 20.1 -Refer to Figure 20.1. The opportunity cost of producing a bushel of soybeans in the Canada is

Every president who has held office since the General Agreement on Tariffs and Trade was signed has

The ratio at which one country trades a domestic product for imported product is that country's

Refer to the information provided in Figure 20.4 below to answer the question(s) that follow. Figure 20.4 -Refer to Figure 20.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. With free trade domestic consumption is

Country A would have an absolute advantage compared to Country B in the production of corn if

It is a valid argument that industries need to be protected from foreign competition because foreign wages are substantially lower than wages paid to U.S. workers.

If Mexico has a exports of 40 billion pesos and imports of 50 billion pesos, it is running a trade surplus.

For any pair of countries, there is

Refer to the information provided in Table 20.3 below to answer the question(s) that follow. Table 20.3 United States Belgium Raspberries \ 9 9 euros Chocolate \ 12 27 euros -Refer to Table 20.3. If the exchange rate is $1 = 1 euro, then

Refer to the information provided in Figure 20.1 below to answer the question(s) that follow. Figure 20.1 -Refer to Figure 20.1. The opportunity cost of producing a bushel of alfalfa in Canada is

Refer to the information provided in Figure 20.2 below to answer the question(s) that follow. Figure 20.2 -Refer to Figure 20.2. The opportunity cost of 1 ________ is 4 ________ in the United States and 1.5 ________ in England.

If the exchange rate between the United States and Mexico changes from $1 = 8 pesos to $1 = 9 pesos, then, ceteris paribus, the price of American goods in Mexico