Exam 20: International Trade, Comparative Advantage, and Protectionism

The advantage in the production of a product enjoyed by one country over another when it uses ________ to produce that product than the other country does is an absolute advantage.

If a nation has most-favored-nation status conferred on it, then exports from that country

The economic basis for trade is based on absolute advantage.

The software industry depends on highly trained workers, who are abundantly available in Country A. The heavy equipment industry depends on the availability of a large stock of physical capital with which Country B is well endowed. According to Heckscher-Ohlin theorem

An argument in favor of free trade is that trade barriers prevent a nation from reaping the benefits of specialization.

A country's balance of trade must be balanced.

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 U.S. has

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

Country A has a comparative advantage compared to Country B in the production of shoes if

Germany placed a limit on the amount of beer that can be imported into Germany. This is an example of

It costs a computer manufacturer $1,000 to produce a personal computer. This manufacturer sells these computers abroad for $600. This is an example of

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

Related to the Economics in Practice on page 673: If the candle makers in the petition were able to gain protection for their industry, the French economy would most likely

Government payments made to domestic firms in order to encourage exports are called

If the opportunity cost of corn to wheat is 3:1 in the United States and 5:1 in France, only the United States would benefit from trade if the actual terms of trade between corn and wheat were 2:1.

Suppose that Argentina and Chile are both engaged in the production of copper and wheat, and that Argentina has an absolute advantage in the production of both goods. If Chile has a comparative advantage in the production of copper, then Chile

The U.S. tariff law that set off an international trade war in the 1930s was the

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 = 1 euro, then

When one country can produce a product at a lower cost in terms of other goods, that country is said to have

A country has a trade surplus when