Exam 18: Gaining From International Trade

Figure 17-1 -In Figure 17-1, in the absence of trade, the domestic price of shoes would be P_n. If the United States moved from a no-trade situation to free trade, which of the following would happen?

Which of the following restricts the volume of international trade?

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

Relative to a no-trade situation, if the United States imported jeans, the U.S. domestic price of jeans would

Figure 17-12 -In Figure 17-12, with a tariff of $0.50 per unit and a world price of $1.00,

Figure 17-8 -Refer to Figure 17-8. If this country allows free trade in wagons,

The following table indicates the production possibilities of cars and clothing per worker day in the United States and Japan. Which of the following is true?

Data on trade barriers, income levels, and the growth of per capita GDP indicate that

Figure 17-8 -Refer to Figure 17-8. If this country allows free trade in wagons,

Measured as a share of the economy, the size of the trade sector (exports plus imports) of the United States has

Imposing a restrictive quota on the import of dishwashers will likely

If the United States imports low-cost goods produced in low-wage countries instead of producing the goods domestically,

If the United States imposes an import quota on clothing, U.S. imports

Economically speaking, tariffs are

Which of the following is true?

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

Figure 17-2 -In Figure 17-2, in the absence of trade, the domestic price of shoes is P_n. Since many foreign countries have a comparative advantage in the production of shoes, when the United States begins to trade, the domestic price will fall to the world price. When this happens, what does the quantity Q_c through Q_p represent?

The law of comparative advantage indicates that

Suppose that in the absence of trade, the U.S. price for peas was lower than the world price for peas. Would allowing international trade mean that the United States would import or export peas? Who in the United States would benefit and who would lose with a free trade policy, and would the gains be greater than the losses?

Figure 17-7 The domestic country is Jamaica. -Refer to Figure 17-7. With trade, Jamaica