Exam 20: International Trade, Comparative Advantage, and Protectionism

Suppose that Greece and Portugal are both engaged in the production of grapes and figs, and that Greece has an absolute advantage in the production of both goods. If Portugal has a lower opportunity cost for producing figs, then

The terms of trade refers to

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 theory of comparative advantage suggests that

The Heckscher-Ohlin theorem says that a country is likely to have a comparative advantage in a labor intensive product if it has a large labor supply.

Natural comparative advantage comes from factor endowments.

Free trade allows the people of a country to consume outside their production possibility frontier.

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 United States is

Refer to the information provided in Table 20.2 below to answer the question(s) that follow. Table 20.2 China Thailand Tractors Motorcycles Tractors Motorcycles 0 300 0 300 5 250 5 225 10 200 10 150 15 150 15 75 20 100 20 0 25 50 - - 30 0 - - -Refer to Table 20.2. The most that China will be willing to pay for a motorcycle is

If the exchange rate between the United States and Japan changes from $1 = 100 yen to $1 = 110 yen, then, ceteris paribus, the price of American goods in Japan

Suppose that the United States and Italy both produce wine and shoes. In the United States, wine sells for $10 a bottle and shoes sell for $40 a pair. In Italy, wine sells for 15 euros a bottle and shoes sell for 20 euros a pair. If the current exchange rate is 0.8 euro to the dollar, then

If the exchange rate between the United States and India changes from $1 = 60 rupees to $1 = 10 rupees, ceteris paribus

Which of the following phenomena cannot be explained by the simple comparative advantage theory?

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. Trade will flow in both directions between countries only if the price of the euro is between

Suppose a U.S. dollar exchanges for 2 British pounds, then each pound is worth

Goodwill can be a source of comparative advantage.

For ________, there is a range of exchange rates that can lead automatically to both countries realizing the gains from specialization and comparative advantage.

In 2014, the United States ran a trade deficit of 3.1 percent of GDP.

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. In Vietnam, the opportunity cost of

The main advantage of trade between two countries is that

If Holland decreases subsidies to its tulip growers, the price of tulips in the United States will rise.