Exam 5: International Trade

Import protections are often imposed because:

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. In Mexico, the opportunity cost of producing 40 tractors is _____ barrels of crude oil.

China, which is labor-abundant, has a comparative advantage in clothing production, which is labor-intensive. Which model explains this pattern of comparative advantage?

Bangladesh exports shirts, the making of which is labor-intensive, to the United States. The likely source of Bangladesh's comparative advantage in shirts is:

Use the following to answer questions: -(Table: Production Possibilities for Machinery and Petroleum) Use Table: Production Possibilities for Machinery and Petroleum. The opportunity cost of _____ is _____ in the United States as (than) in Mexico.

If the _____ differ(s) between two countries, this suggests the possibility for mutually advantageous trade.

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 and the change in total surplus is area:

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. Sri Lanka will _____ tea and the volume of trade will equal _____.

The United States places a tariff on imported Brazilian ethanol. The impact of this tariff on the domestic ethanol market is a _____ domestic price, _____ consumer surplus, and _____ producer surplus.

A direct restriction on the quantity of an import is called a(n):

Countries that engage in trade will tend to specialize in goods in which they have a(n) _____ and will _____ those goods.

Use the following to answer questions: -(Table: Production Possibilities) Use Table: Production Possibilities. The opportunity cost of 1 computer for _____ is _____box (es) of roses.

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. _____ has/have an absolute advantage in producing crude oil.

Use the following to answer questions: -(Figure: The Market for iPhones) Use Figure: The Market for iPhones. Assume that P_A is the autarky price, P_W is the world price, and D and S represent domestic demand and supply, respectively. Producer surplus in free trade equals the area:

Use the following to answer questions: -(Figure: The Market for Laptops) Use Figure: The Market for Laptops. Assume that S and D are the domestic supply and demand curves and the world price is P_W. Identify the area of deadweight loss when a tariff raises the domestic price from the world price to P_T.

A tariff _____ the price received by domestic producers and _____ the price paid by domestic consumers.

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 microchip in Indonesia is _____ tire(s).

The belief that trade must be bad for exporting countries because the foreign workers are paid very low wages by our standards is the _____ fallacy.

If a country has the comparative advantage in producing wooden furniture, then with free trade:

In autarky, the amount of a country's production and consumption of a good must be identical.