Exam 20: International Trade, Comparative Advantage, and Protectionism

A quota on sugar harms domestic producers of sugar.

If the opportunity cost of corn to wheat is 3:1 in the United States and 5:1 in France, only France would benefit from trade if the actual terms of trade between corn and wheat were 7:1.

GATT is the international agreement signed by the United States and ________ other countries in 1947 to promote the liberalization of foreign trade.

If the opportunity cost of corn to wheat is 3:1 in the United States and 5:1 in France, both countries would benefit from trade if the actual terms of trade between corn and wheat were 4:1.

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. If both countries specialize and trade with each other, Thailand will export ________ and China will import ________.

Refer to the information provided in Figure 20.5 below to answer the question(s) that follow. Figure 20.5 -Refer to Figure 20.5. The domestic price of oil is $130 per barrel. This country imports 5 million barrels if the world price of oil is

The Smoot-Hawley tariff set off an international trade war in the

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 = 3 euros, then

Dumping refers to a country selling its exports at a price lower than its selling price at home.

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 = 2 euros, then

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. If there is free trade, this country will import ________ leather wallets.

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. If the tariff is raised so that it now equals $10, tariff revenue in this country will be

According to the theory of comparative advantage, a country

An example of a(n) ________ comparative advantage is U.S. consumers buying automobiles produced in Japan because Japanese companies have a reputation for producing a higher-quality automobile than those produced in the United States.

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. Before specialization, Mexico produces 120 bushels of oranges and 80 bushels of bananas, and Guatemala produces 40 bushels of oranges and 20 bushels of bananas. After specialization, the increase in orange production is

The free-trade agreement signed by Canada, Mexico, and the United States in 1992 is known as

Which of the following phenomena can be explained by the simple comparative advantage theory?

Refer to the information provided in Figure 20.5 below to answer the question(s) that follow. Figure 20.5 -Refer to Figure 20.5. The domestic price of oil is $130 per barrel. This country imports 14 million barrels if the world price of oil is

Refer to the information provided in Figure 20.5 below to answer the question(s) that follow. Figure 20.5 -Refer to Figure 20.5. The domestic price of oil is $130 per barrel, and the world price of oil is $120 per barrel. If the domestic government imposes a tariff of $10 per barrel, it will

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. The most that India will be willing to pay for a lb. of tea is