Exam 20: International Trade, Comparative Advantage, and Protectionism

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 the tariff domestic production is

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

If a country's imports are less than its exports, a country has a trade surplus.

If the slopes of the ________ involving corn and wheat in the United States and Canada are equal, specialization does not benefit either country.

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. In Thailand, the opportunity cost of

Trade barriers are forms of protection that shield some sector of the economy from foreign competition.

When trade is ________, patterns of trade and trade flows result from the independent decisions of thousands of importers and exporters, as well as millions of private households and firms.

Which of the following is false?

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

The quantity and quality of ________ of a country are its factor endowments.

Tariffs, quotas, and exports subsidies all increase domestic production.

The international agreement signed by the United States and 22 other countries in 1947 to promote the liberalization of foreign trade is known by its initials as

The United States imports DVD recorders from China and China imports computer chips from the United States. If the theory of comparative advantage guides trade between the two countries, it must be true that

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. Now domestic production costs fall so that the equilibrium domestic price of a pair of shoes is $70. This would cause

Trade allows the people of a country to produce outside their production possibility curve.

According to comparative advantage, trade between two countries

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. Which of the following statements is true?

If you are traveling in Thailand and you purchase a meal that costs 1,400 baht and the current exchange rate is 35 baht to the dollar, then the price of the meal in U.S. currency is

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. In Mexico, the opportunity cost of 1 bushel of oranges is

If a country has a trade deficit of $30 billion, which of the following can be true?