Exam 8: International Trade

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 Indonesia is:

Use the following to answer questions: Scenario: The Production of Wheat and Toys The table describes the production of two goods, wheat and toys, in country A and country B. Each country has a linear production possibility frontier with respect to its production of the two goods. The numbers in each column represent the total number of units each country could produce if it used all of its resources to produce the good. -(Scenario: The Production of Wheat and Toys) Look at the scenario Production of Wheat and Toys. The opportunity cost of producing a unit of wheat in country B is:

Use the following to answer questions: Figure: The Market for MP3 Players -(Figure: The Market for MP3 Players) Look at the figure The Market for MP3 Players. Assume that S_d represents the domestic supply curve and D_d represents the domestic demand curve. If the world price equals $100 and there is free trade, this country:

While the United States generally follows a policy of free trade, this is true particularly for agriculture and textiles, in which all restrictions on international trade have been removed.

China, which is labor-abundant, has a comparative advantage in clothing production, which is labor-intensive. Which of the following models explains this pattern of 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. _____ has (have) an absolute advantage in producing crude oil.

If the United States imposes an import quota on French wines, the result in the short run is likely to be _____ profits for American wine producers and _____ profits for French wine producers.

If a nation exports a good when the economy is opened to trade, relative to the autarky price, the domestic price of the good will _____ and domestic consumption will _____.

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 the world price of melons is equal to E, Russia will _____ of melons.

Use the following to answer questions: Figure: The Production Possibility Frontiers for Jackson and Tahoe -(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe. In autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat. If the two countries engage in international trade and specialize completely and if the price of 1 head of cattle equals the price of 2 bushels of wheat, world production of cattle will:

Use the following to answer questions: Figure: The Market for Oranges in South Africa -(Figure: The Market for Oranges in South Africa) Look at the figure The Market for Oranges in South Africa. In autarky, the price of oranges in South Africa is P₁. When the economy is opened to trade, the price falls to P_W. South Africa will _____ oranges and the volume of trade will equal _____.

The United States can produce wine domestically, but it can also import wine if the world price is lower than the domestic price. If the United States imports wine, consumer surplus will _____ by _____ the _____ in producer surplus; total surplus will _____.

If the opportunity costs of production are constant, then the production possibility frontier is:

Use the following to answer questions: Figure: The Market for Melons in Russia II -(Figure: The Markets for Melons in Russia II) Look at the figure The Market for Melons in Russia II. As a result of a tariff that raises the world price from $10 to $15, the country has a deadweight loss equal to:

Japan must give up the production of 75 computers to produce 25 additional cellular telephones. The opportunity cost of producing 3 computers is _____ cell phone(s).

If a country has the comparative advantage in producing cloth, in the market for cloth the autarky price would be _____ the world price and the country would _____ cloth.

The United States places a tariff on imported Brazilian ethanol. The impact of this tariff on the domestic ethanol market is a _____ domestic price, _____ consumer surplus, and _____ producer surplus.

Canada, Mexico, and the United States have:

Bangladesh exports shirts, the making of which is labor-intensive, to the United States. The likely source of Bangladesh's comparative advantage in shirts is:

In practice much trade protection reflects the political influence of import-competing producers.