Exam 33: International Trade

Exhibit 33-9 ​ -Refer to Exhibit 33-9. In the no specialization-no trade case, suppose country X produces and consumes 100 units of good A and 20 units of good B. Country Y produces and consumes 20 units of good A and 60 units of good B. If the two countries specialize and trade, and the actual amounts traded are 125 units of good A for 25 units of good B, how many more units of good B will country Y consume by specializing and trading?

The national defense argument for trade restriction holds that

Exhibit 33-7 ​ -Refer to Exhibit 33-7. The world price of good X is $15. Under a policy of free trade, the U.S. production of good X would be

The national defense argument for trade protectionism holds that

Which of the following statements is false?

The situation where a country can produce a good at a lower opportunity cost than another country is called a(n) __________ advantage.

Tariffs raise the price of imported goods, but quotas rarely do.

Describe who benefits and who loses from tariffs and from quotas. What is the major difference between the effects of a quota and the effects of a tariff?

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 government collects tariff revenues on sugar imports in the amount of __________ million.

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

Tariffs and quotas are often imposed when a government is more responsive to __________ interests, and the benefits of those trade restrictions are often __________.

Exhibit 33-1 ​ -Refer to Exhibit 33-1. Country A is the lower opportunity cost producer of

Exhibit 33-7 ​ -Refer to Exhibit 33-7. The world price of good X is $15. If imports of good X are legally limited to 30 units, the price of X in the United States would be

Countries tend to specialize in the production of goods in which they have a comparative advantage because

If, at the world price, domestic producers are producing and selling 100 units of a good, then at the world price plus tariff it follows that

A French firm sells its good at a lower price in England than in France. It follows that the French firm is necessarily

Exhibit 33-7 ​ -Refer to Exhibit 33-7. Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X). Americans purchase ______ units of good X from U.S. producers and import _______ units of good X from abroad.

With a quota, the __________ is greater than the __________.

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

Company Z is a U.S. company that has just entered the market for a given good and is the first in this country to produce that good. The good is already being produced in many foreign countries is exported to the United States. If company Z wants to restrict this foreign competition, it will most likely use which of the following arguments?