Exam 18: Gaining From International Trade

Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in

An increase in the tariff on foreign-produced automobiles would most likely help

In 1993 the negotiations over the North American Free Trade Agreement and the General Agreement on Tariffs and Trade were frequently characterized by comments such as, "Free trade with low-wage countries will cause the wages of U.S. workers to fall." Identify the errors in statements such as this.

If tariffs are decreased, the long-run effect is most likely to be

If the U.S. put an import quota on clothes dryers, it would

Which of the following restricts the volume of international trade?

Figure 17-8 -Refer to Figure 17-8. With trade, the price of wagons in this country is

According to international trade theory, a country can gain if it

A decrease in the tariff on foreign-produced automobiles would be most likely to harm

The primary benefits derived from tariffs usually accrue to the

The primary source of purchasing power used to buy imported goods is the

Figure 17-9 -Refer to Figure 17-9. The imposition of a tariff on carnations

Globalization is becoming more of a worldwide phenomenon because

Figure 17-12 -If the country illustrated in Figure 17-12 is initially trading without restrictions at a world price of $1.00, net welfare loss as a result of a tariff of $0.50 per unit is represented by area

Trade restrictions like tariffs and quotas will

Dumping is

When a country allows trade and becomes an exporter of a good,

Assume, for the U.S., that the domestic price of beef without international trade is lower than the world price of beef. This suggests that with trade,

Figure 17-12 -If the country illustrated in Figure 17-12 is initially trading without restrictions at a world price of $1.00, the loss of consumer surplus as a result of a tariff of $0.50 per unit is represented by area

Firms in a high-wage nation such as the U.S. can compete effectively with imports from low-wage nations if