Exam 18: International Trade and Public Policy

Which of the following trade agreements, which took effect in 1994 and was implemented over a 15-year period, eliminates all tariffs and other trade barriers between its members?

Which of the following tariffs resulted in worldwide retaliation against the United States during the Great Depression?

National policy always overrides free trade in matters of environmental concern.

Table 18.1 Daily Output of Russia and Panama -Refer to Table 18.1. The opportunity cost of a hat in Panama is

Acquiring knowledge and skills by participating in the production process is called "learning by doing."

As a whole, nations are better off after trade and specialization because

The consumption possibilities curve shows the combinations of goods that can be

Figure 18.1 -Refer to Figure 18.1. Mutually beneficial terms of trade between the United States and Canada are

Suppose there are only 2 nations, Atlantis and Pacifica, and only two goods, surfboards and kayaks. If Atlantis produces only surfboards, it can make 50 per day. If Atlantis produces only kayaks, it can make 75 per day. If Pacifica produces only surfboards, it can make 75 per day. If Pacifica produces only kayaks, it can make 75 per day. After trade begins, ________ will specialize in the production of surfboards and ________ will specialize in the production of kayaks.

Figure 18.1 -Refer to Figure 18.1. The opportunity cost of hang gliders in the United States is

-Refer to Figure 18.4. With a tariff, how much does the government collect for each glove imported into Duckland?

Recall the Application about the impact tariffs have on lower income households to answer the following question(s). Economists have found that tariffs in the United States fall most heavily on lower-income consumers. In the United States, tariffs are very high on textiles, apparel items and footwear, and within these categories the highest tariffs fall on the cheapest products. In general, to protect U.S. industries, tariffs are highest on labor-intensive goods. -According to this Application, tariffs in the United States are very high on textiles, apparel items and footwear, and within these categories tariffs are highest on the cheapest products. These tariffs disproportionately impact lower-income households because

The ability to produce a product at a lower resource cost than another nation can produce the same product is called comparative advantage.

If the opportunity cost of 1 wristwatch is 4 wall clocks in Japan and 2 wall clocks in Germany, it makes sense for Germany to produce wristwatches.

Figure 18.1 -Refer to Figure 18.1. Canada has a comparative advantage in the production of

-Refer to Figure 18.4. With free trade, what is the equilibrium price of gloves in Duckland?

-Refer to Figure 18.4. With a tariff or quota, what is the equilibrium price of gloves in Duckland?

If a firm produces components of its goods and services in other countries, it is said to be outsourcing.

Table 18.1 Daily Output of Russia and Panama -Refer to Table 18.1. After trade begins, ________ will specialize in the production of hats and ________ will specialize in the production of gloves.

The rate at which units of one product can be exchanged for units of another product is called the terms of trade.