Exam 5: International Trade

Which item is an example of a tariff?

Use the following to answer questions: -(Table: Production Possibilities for the United States and Canada) Use Table: Production Possibilities for the United States and Canada. Both nations can produce cars and lumber. In _____, the opportunity cost of _____ cars is _____ board feet of lumber.

A blockade at the border between the United States and Canada prevents the entry of all lumber products to the United States from Canada. This blockade will:

Use the following to answer questions: -(Figure: The Production Possibilities for Two Countries) Use Figure: The Production Possibilities for Two Countries. The opportunity cost of producing 1 tire in Indonesia is _____ microchip(s), while the opportunity cost of producing 1 tire in Malaysia is _____ microchip(s).

Use the following to answer questions: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Use Figure: The Production Possibility Frontiers for Jackson and Tahoe. In autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat. Assume each nation specializes completely, based on comparative advantage, and the price of 1 head of cattle equals the price of 2 bushels of wheat. If Jackson exports 120 bushels of wheat to Tahoe, Tahoe will export _____ head of cattle to Jackson.

Use the following to answer questions: -(Figure: The Market for Oranges in South Africa) Use Figure: The Market for Oranges in South Africa. In autarky, the price of oranges in South Africa is P₁. When the economy is opened to trade, the price falls to P_W. South Africa will _____ oranges, and the volume of trade will equal _____.

The job creation argument for protection against free trade is:

(Figure: The Gains from International Trade) Use Figure: The Gains from International Trade. If each country specializes completely in the good for which it has a comparative advantage, each country must trade _____ computer(s) for _____ box of roses to consume at combination C $\prime$

In 2002, the steel industry argued that higher tariffs on steel were necessary to help fight the war on terrorism. This is an example of the _____ argument.

If the executives of the U.S. silicon chip industry lobby Congress for protection from imports on the grounds that the military should have an unrestricted domestic supply of silicon chips, they are using the _____ argument.

An urbanized country has 100 million workers living on 100 square miles of land. A country that is principally rural has 1 million workers living on 10 square miles of land. From this information we know that the urbanized country is _____ relative to the rural country.

Use the following to answer questions: -(Figure: The Market for Calculators) Use Figure: The Market for Calculators. Assume that S and D represent the domestic demand and supply of calculators. The world price, P_W, equals $100. The government imposes a quota restricting imports to 25 calculators. If import licenses are granted to foreigners, the net loss due to the import quota is equal to area:

If labor is scarce in Sri Lanka but capital is abundant, when Sri Lanka opens to trade, the price of labor will _____ and the price of capital will _____.

Use the following to answer questions: -(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Use Figure: The Production Possibility Frontiers for Jackson and Tahoe. Tahoe has an absolute advantage in producing:

If a country imposes a tariff on imported shoes, we expect the domestic price of shoes to _____ and the quantity of shoes consumed in the domestic market to _____.

Use the following to answer questions: -(Table: Production Possibilities for Machinery and Petroleum) Use Table: Production Possibilities for Machinery and Petroleum. The opportunity cost in Mexico of producing 10 units of machinery is _____ units of petroleum.

Use the following to answer questions: -(Figure: A Tariff on Oranges in South Africa) Use Figure: A Tariff on Oranges in South Africa. When the government imposes a tariff on imported oranges, the price of oranges in South Africa rises from P_W to P_T and the volume of imports falls to:

Use the following to answer questions: -(Figure: The Market for Computers) Use Figure: The Market for Computers. Assume that P_A is the autarky price and P_W is the world price. Consumer surplus without international trade would be area:

Use the following to answer questions: -(Figure: Domestic Market for Digital Cameras) Use Figure: The Domestic Market for Digital Cameras. Assume that P_A is the autarky price and P_W is the world price. Consumer surplus after international trade is equal to the area:

Use the following to answer questions: -(Figure: The Production Possibilities for Two Countries) Use Figure: The Production Possibilities for Two Countries. Trade will NOT take place if 1 microchip trades for _____ tire(s).