Exam 20: International Trade, Comparative Advantage, and Protectionism

Suppose that Paraguay and Guyana are both engaged in the production of soybeans and grapefruit, and that Paraguay has an absolute advantage in the production of both goods. If Guyana has a comparative advantage in the production of soybeans, then Guyana

If the slopes of the production possibility frontiers involving sugar and rice in countries A and B are equal

Comparative advantage is the only reason countries trade.

A country enjoys a comparative advantage in the production of a good if that good can be produced at a lower cost in terms of other goods.

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 falls, then we would expect

If the price of a car in the United States is $22,000, and the exchange rate between the dollar and the Japanese yen falls from 125 yen to 105 yen per dollar, then the price of the American car in Japan will

The Heckscher-Ohlin theorem explains why the U.S. both imports and exports cars.

In general, for any two countries, there are many exchange rates that will lead to gains from trade, based on comparative advantage.

Refer to the information provided in Table 20.1 below to answer the question(s) that follow. Table 20.1 $\quad$$\quad$$\quad$$\quad$$\quad$ $\text {Mexico}$$\quad$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Guatemala}$ Oranges Bananas Oranges Bananas bushel/acre bushel/acre bushel/acre bushel/acre 200 0 50 0 160 40 40 20 120 80 30 40 80 120 20 60 40 160 10 80 0 200 0 100 -Refer to Table 20.1. Guatemala has

Tariffs tend to increase the domestic price of the product.

The quantity and quality of labor, land, and natural resources of a country are its

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 a truck is ________ car(s) in England and ________ car(s) in the United States.

Refer to the information provided in Table 20.6 below to answer the question(s) that follow. Table 20.6 United States France Peas \ 3 3 euros Carrots \ 4 9 euros -Refer to Table 20.6. If the exchange rate is $1 = 3 euros, then

If the price of a car in the United States is $26,000, and the exchange rate between the dollar and the British pound rises from $1.50 to $2.00 per pound, then the price of the American car in Britain will

If exchange rates end up in the right ranges, the free market will drive each country to shift resources into those sectors in which it enjoys a comparative advantage.

In general, free-trade makes the people of a country better off.

The United States has a comparative advantage in the production of wheat, and Haiti has a comparative advantage in the production of sugar. If both countries specialize based on the theory of comparative advantage

In 2003, the ________ ruled that U.S. tariffs on steel imported from the EU were unfair and allowed the EU to issue retaliatory tariffs on U.S. products.

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 the United States is

________ involves a country selling its exports at a price lower than its cost of production.