Exam 8: International Trade

Use the following to answer questions: -(Table: Production Possibilities in the United States and Colombia) Look at the table Production Possibilities in the United States and Colombia. Suppose that in autarky, Colombia produces 10 tons of coffee and 3 computers. The United States produces 8 tons of coffee and 20 computers. Can specialization and trade increase global production? Justify your answer.

Use the following to answer questions: Figure: The Market for Roses -(Figure: The Market for Roses) Look at the figure The Market for Roses. Assume that P_A is the autarky price and P_W is the world price. Consumer surplus with international trade would be area:

Use the following to answer questions: Figure: The Market for Melons in Russia -(Figure: The Markets for Melons in Russia) Look at the figure The Market for Melons in Russia. If Russia is trading based on comparative advantage and the world price is D, then Russia has _____ in the production of melons.

Use the following to answer questions: Figure: The Production Possibilities for Two Countries -(Figure: The Production Possibilities for Two Countries) Look at the figure The Production Possibilities for Two Countries. The opportunity cost of producing 1 radio in Malaysia is:

When an economy moves from autarky to free international trade, for industries in the export sector, consumer surplus _____, producer surplus _____, and the economy as a whole _____.

Use the following to answer questions: Figure: The Market for Calculators -(Figure: The Market for Calculators) Look at the figure The Market for Calculators. Assume that S and D represent the domestic demand and supply of calculators. The world price, P_W, equals $100. The government imposes a quota restricting imports to 25 calculators. If import licenses are granted to foreigners, the net loss due to the import quota is equal to area:

If a country removes a tariff on imported shoes, we expect the domestic price of shoes to _____ and the quantity of shoes consumed in the domestic market to _____ .

Chile has a comparative advantage over the United States in copper. Which of the following is a source of this comparative advantage?

Use the following to answer questions: -(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil. The opportunity cost of _____ is _____ in the United States as (than) in Mexico.

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips. From this information, we know that:

The United States must give up the production of 500 bicycles to produce 20 additional tractors. The opportunity cost of producing 5 tractors is _____ bicycles.

Restrictions on free international trade designed to insulate domestic industries from competitive market forces that originate beyond the borders of the country are _____ policies.

Use the following to answer questions: -(Table: Production Possibilities for Machinery and Petroleum) Look at the table Production Possibilities for Machinery and Petroleum. The opportunity cost of _____ is _____ in the United States as (than) in Mexico.

Use the following to answer questions: Figure: The Market for Computers -(Figure: The Market for Computers) Look at the figure The Market for Computers. Assume that P_A is the autarky price and P_W is the world price. Consumer surplus with international trade is area:

Use the following to answer questions: -(Table: Production Possibilities for the United States and Canada) Look at the table Production Possibilities for the United States and Canada. _____ has (have) an absolute advantage in producing cars.

The job creation argument for protection against free trade:

Use the following to answer questions: -(Table: Production Possibilities for the United States and Canada) Look at the table Production Possibilities for the United States and Canada. Both nations can produce cars and lumber. If these nations trade, Canada has the comparative advantage in _____ and should trade _____ to the United States in exchange for _____.

Use the following to answer question: Figure: The Gains from International Trade -(Figure: The Gains from International Trade) Look at the figure The Gains from International Trade. If each country specializes completely in the good for which it has a comparative advantage, each country must trade _____ computer(s) for _____ box of roses to consume at combination C'.

Use the following to answer questions: Figure: A Tariff on Oranges in South Africa -(Figure: A Tariff on Oranges in South Africa) Look at the figure A Tariff on Oranges in South Africa. When the government imposes a tariff on imported oranges, the price of oranges in South Africa rises from P_W to P_T and the volume of imports falls to:

France and England both produce wine and clothing with constant opportunity costs. France will have a comparative advantage in wine production if: