Exam 8: International Trade

Suppose a nation is considering two alternative policies to protect a domestic industry from world trade. The two policies are an import quota of X units and a per-unit tariff that would reduce imports to X units. Though either policy would result in only X imported units of this good, there is a fundamental difference in the outcome. Explain this difference.

If Japan levies tariffs on U.S. goods entering Japan, this will tend to:

The United States must give up the production of 300 motorcycles to produce 20 additional SUVs with the same resources. In this case, the opportunity cost of producing 5 SUVs is ________ motorcycles.

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. Which country should export coffee and which country should export computers? Justify your answer.

If Indonesia has lower wage rates than India, trade between these two nations will make India worse off.

Britain must give up the production of 75 hats to produce 25 additional sweaters. The opportunity cost of producing 4 sweaters is _____ hats.

Mexico is relatively labor-abundant when compared with the United States. Therefore, Mexico has a comparative advantage in _____ compared with the United States.

If the opportunity cost of producing either of two goods in question is constant, the production possibility frontier is:

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. If Indonesia and Malaysia specialize completely in the production of the good of their comparative advantage, the two nations together will produce _____ tires and _____ radios.

As measured by a percentage of the entire economic output of the United States, imports have been _____ and exports have been _____.

In a single year, Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Venezuela can raise 50 tons of beef or produce 750 boxes of tulips. When the two countries begin trading beef for tulips, we expect the consumer surplus from beef consumption to:

Which of the following trade patterns is best explained by increasing returns?

A country that is relatively labor-abundant and relatively land-scarce opens to international trade. As a result, it finds that wages _____ and rents _____.

Advocates of trade barriers suggest that the barriers are needed for national security, job creation, and to:

Both the United States and Canada produce automobiles and their components; however, each particular model or component is produced in only one of the two countries. Which of the following explains this pattern of production and trade?

The World Trade Organization:

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. Producer surplus without international trade would be area:

A regulation that specifies the maximum amount of a good or service that may be imported during a specified period is a(n):

If the United States can produce 30 computers for every car it produces and Japan can produce 15 computers for every car it produces, _____ has the _____ advantage in car production.

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. If Indonesia and Malaysia trade 1 radio for 1.5 tires, the most that Indonesia can consume is _____ radios and _____ tires, while the most that Malaysia can consume is _____ radios and _____ tires.