Exam 5: International Trade

Use the following to answer questions: -(Figure: The Production Possibilities for Two Countries) Use Figure: The Production Possibilities for Two Countries. Indonesia has a comparative advantage in producing _____, while Malaysia has a comparative advantage in producing _____.

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

The Heckscher-Ohlin model cannot explain United States-Mexico trade since the United States has more labor and more land than Mexico.

Use the following to answer questions: -(Figure: The Market for Roses) Use Figure: The Market for Roses. Assume that P_A is the autarky price and P_W is the world price. Producer surplus with international trade would be area:

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. When the economy moves from autarky, under which the price is $150, to free trade, consumer surplus rises by area _____ and producer surplus falls by _____.

Use the following to answer questions: -(Figure: The Market for Tea in Sri Lanka) Use Figure: The Market for Tea in Sri Lanka. In autarky, the price is P₁. When the economy is opened to trade, the price rises to P_W and the change in total surplus is:

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. Total surplus before international trade is equal to the area:

France and England both produce wine and clothing with constant opportunity costs. France will have a comparative advantage in wine production if:

The organization that oversees global trade negotiations and settles trade disputes among its members is the:

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

A regulation that specifies the maximum amount of a good or service that may be imported during a specified period is a(n):

When a country exchanges goods with another country, in the short run:

The United States can produce wine domestically, but it can also import wine if the world price is lower than the domestic price. If the United States imports wine, consumer surplus will _____ by _____ the _____ in producer surplus; total surplus will _____.

The Ricardian model of international trade assumes that countries have the usual bowed-out (concave to the origin) production possibility frontiers.

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. _____ has/have an absolute advantage in producing lumber.

Use the following to answer questions: -(Figure: The Market for Beats by Dre) Use Figure: The Market for Beats by Dre. Assume that S_d represents the domestic supply curve and D_d represents the domestic demand curve. If the world price equals $100 and there is free trade, this country:

Use the following to answer questions: -(Figure: Comparative Advantage and the Production Possibility Frontier) Use Figure: Comparative Advantage and the Production Possibility Frontier. _____ has an absolute advantage in the production of _____ and a comparative advantage in the production of _____.

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. The domestic price rises to _____ and the quota rent is equal to area _____.

The main difference between a tariff and an import quota is that:

Use the following to answer questions: -(Figure: The Production Possibilities for Two Countries) Use Figure: The Production Possibilities for Two Countries. Both nations will gain from trade when 1 tire trades for _____ microchip(s).