Exam 17: International Trade

The following image shows the market for wheat for the country of Palatino.S^D is the domestic supply of wheat,and D^D is the domestic demand for wheat.Suppose the world price of wheat is $9 per bushel.Suppose a specific tariff of $6 is imposed on each bushel of wheat imported.The net welfare loss from the tariff is represented by the area _____.

Quotas and tariffs discourage foreign governments from retaliating with quotas and tariffs of their own.

The following table shows the demand,supply,and price of tulips in the Netherlands.If the world price of tulips is $4 and there are no trade restrictions,the Netherlands will: Table 19.2 ? ? Domestic Supply and Demand for Tulips in the Netherlands $\begin{array}{|c|c|c|c|}\hline {\text { Demand }} & &{\text { Supply }} \\\hline Q & P(\$) & Q & P(\$) \\\hline 12,000 & 0 & 6,000 & 0 \\\hline 10,000 & 1 & 7,000 & 1 \\\hline 8,000 & 2 & 8,000 & 2 \\\hline 6,000 & 3 & 9,000 & 3 \\\hline 4,000 & 4 & 10,000 & 4 \\\hline\end{array}$

If a country has an absolute advantage in producing a good,_____.

The General Agreement on Tariffs and Trade (GATT)was established in:

For each watch Marina produces,it gives up the opportunity to make 50 pounds of cheese.Cambria can produce one watch for every 100 pounds of cheese it produces.If specialization and trade were to occur between these two countries,which of the following is true with regard to opportunity costs in the two countries?

If a tariff increases,everybody loses except the government imposing the tariff.

Which of the following was one of the objectives of the North American Free Trade Agreement (NAFTA)?

The following table shows per-day production data of rice and T-shirts for two countries,Cambria and Bodoni.Based on the table,it can be said that the opportunity cost of 1 ton of rice in Cambria is _____. ? Table 19.1 ? ? Cambria Bodoni Tons of rice per day T-shirts per day Tons of rice per day T-shirts per day 20 0 100 0 18 80 90 100 16 160 80 200 14 240 70 300 12 320 60 400 10 400 50 500 8 480 40 600 6 560 30 700 4 640 20 800 2 720 10 900 0 800 0 1,000

The following graph shows the supply of and demand for baseballs in the United States.If the world price is $3 per baseball and a tariff of $1 per baseball is imposed,then the number of baseballs imported is _____.