Exam 5: International Trade

Assume an economy moves from autarky to free international trade. In the export sector, consumer surplus _____, producer surplus _____, and the economy as a whole _____.

An economy moves from autarky to free international trade. In the import sector, consumer surplus _____, producer surplus _____, and the economy as a whole _____.

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips. In autarky, the opportunity cost of 1 ton of beef in the Netherlands is:

The World Trade Organization:

The United States must give up the production of 300 motorcycles to produce 20 additional SUVs with the same resources. In this case, the opportunity cost of producing 5 SUVs is ________ motorcycles.

Compared with autarky, international trade leads to _____ domestic production in exporting industries and _____ domestic production in import-competing industries.

Use the following to answer questions: -(Table: The Production Possibilities for Tractors and Crude Oil) Use Table: The Production Possibilities for Tractors and Crude Oil. Which statement is TRUE?

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 an import tariff of $20 per calculator. Compared with the free trade situation, the tariff leads to a deadweight loss equal to area:

Policies that limit imports, usually to insulate domestic producers from foreign competition, are known as:

If Indonesia has lower wage rates than India, trade between these two nations will make India worse off.

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips. Trade will take place between these two countries if 1 ton of beef costs _____ boxes of tulips.

In the importing country, the MOST likely effect of a tariff is to:

Use the following to answer questions: -(Figure: The Production Possibilities for Two Countries) Use Figure: The Production Possibilities for Two Countries. Indonesia has an absolute advantage in producing:

If the opportunity costs of production are constant, then the production possibility frontier is:

Japan's comparative advantage in automobiles can be attributed to:

Japan must give up the production of 75 computers to produce 25 additional cellular telephones. The opportunity cost of producing 3 computers is _____ cell phone(s).

Tariffs and import quotas tend to:

_____ oversees international trade agreements.

International trade based on comparative advantage allows a country to produce outside its production possibility frontier.

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. If the two countries engage in international trade and specialize completely and if the price of 1 head of cattle equals the price of 2 bushels of wheat, world production of cattle will: