Exam 33: International Trade

Exhibit 33-3 ​ -Refer to Exhibit 33-3. The world price is P_W. At this price, Americans purchase Q₁ from U.S. producers and import the quantity __________ from foreign producers.

The ability to produce a good at a lower opportunity cost than others is called a(n) __________ advantage.

Exhibit 33-9 ​ -Refer to Exhibit 33-9. For country X, the opportunity cost of producing one unit of good B is __________ unit(s) of good A.

The sale of goods abroad at a price below their cost and below the price charged in the domestic market is called

Exhibit 33-8 ​ -Refer to Exhibit 33-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports). The removal of the $100 per ton tariff would increase consumers' surplus by an amount equal to area

Exhibit 33-11 ​ -Refer to Exhibit 33-11. If the world price (P_W) is operational in the market, then U.S. imports equal

The answer is: "There is a net loss to society." What is the question?

Exhibit 33-11 ​ -Refer to Exhibit 33-11. P_W is the price that exists in the market before a tariff is imposed and P_{W + T} is the price that exists in the market after a tariff is imposed. As a result of the tariff, producers' surplus __________ by the area __________.

Exhibit 33-7 ​ -Refer to Exhibit 33-7. The world price of good X is $15. Under a policy of free trade, U.S. consumers will import ___________ units of X from abroad.

Consumers receive more consumers' surplus when __________.

Exhibit 33-6 ​ -Refer to Exhibit 33-6. The opportunity cost of 1 unit of wine in terms of units of cheese is __________ for country A.

The national defense argument has been used in the past to justify trade restrictions by firms in the peanut industry and the pottery industry.

Which of the following is not an argument for trade restrictions?

How do countries know when they have a comparative advantage in the production of a good?

Exhibit 33-8 ​ -Refer to Exhibit 33-8. Assume that the current price of sugar in the United States is $300 per ton (which includes a $100 per ton tariff on sugar imports). Americans purchase __________ million tons of sugar from U.S. producers and import __________ million tons of sugar from abroad.

Exhibit 33-10 -Refer to Exhibit 33-10. Who has the comparative advantage when it comes to cleaning the house?

Exhibit 33-10 -Refer to Exhibit 33-10. Danielle's opportunity cost of mowing the lawn is

If countries 1 and 2 produce only two goods, A and B, and they have the same opportunity cost for the production of good A (and thus good B), then

A tariff raises the price of the product on which the tariff has been placed, decreases consumers' surplus, increases producers' surplus, and generates tariff revenue for the government.

Exhibit 33-5 ​ -Refer to Exhibit 33-5. The opportunity cost of one unit of good B is __________ for country 1 and __________ for country 2.