Exam 33: International Trade

Exhibit 33-2 ​ -Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is P_W. At this price, producers' surplus equals the area of

Countries that engage in specialization and trade can consume at a level beyond their production possibilities frontier.

Exhibit 33-4 ​ -Refer to Exhibit 33-4. Country 1 has a comparative advantage in the production of __________, and country 2 has a comparative advantage in the production of __________.

Which of the following statements is false?

Exhibit 33-2 ​ -Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is P_W. At this price, consumers' surplus equals the area of

In order for good X to be a likely candidate for offshoring, it must be produced with ______________ labor intensity and be a relatively ________________ good.

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 A will country Y consume by specializing and trading?

The term outsourcing is used to describe work done for a company by individuals working for another company in a different country.

Exhibit 33-2 ​ -Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is P_W. If there is a policy change such that imports are prohibited, the price becomes P_N, U.S. consumers are worse off if imports are __________; specifically, their consumers' surplus changes by area __________.

It is argued that certain industries should be protected from foreign competition because they are needed to secure the United States from foreign aggression. This argument is called the __________ argument.

"New industries should be protected from older established foreign competitors until they are mature enough to compete on an equal basis." This argument for trade restrictions is called the __________ argument.

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 B.