Exam 19: World Trade Equilibrium

The theory that explains the shift of color TV sets production from the United States to Japan and Taiwan is called the _____ theory.

Scenario 20.2 Suppose labor productivity differences are the only determinants of comparative advantage, and both Egypt and produce only corn and cocoa. In Egypt, 10 bushels of corn or 15 pounds of cocoa can be produced in a day. In Ghana, one day of labor can be used to produce either 2 bushels of corn or 8 pounds of cocoa. -Refer to Scenario 20.2. Ghana will be willing to trade cocoa for Egyptian corn if in the international market, 1 pound of cocoa can be exchanged for:

Which of the following counties are largely dependent on trade with the United States?

For purposes of determining comparative advantage, the cost of producing a good in each of two countries is measured in terms of:

"Most textiles worn by American consumers are produced in Asian and South American countries where the opportunity costs of production are lower." This observation refers to the:

We benefit from trade if we are able to obtain a good from a foreign country:

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices. Table 20.5 U.S. Canada Price Quantity Demanded Quantity Supplied Quantity Demanded Quantity Supplied \ 1,200 50 10 60 10 \ 1,400 45 30 50 20 \ 1,600 40 50 40 30 \ 1,800 35 70 30 40 \ 2,000 30 90 20 50 -According to Table 20.5, the international equilibrium price of computers is:

Which of the following looks at the demand side of the market to explain some of the observed international trade patterns?

The oldest theory of comparative advantage is based on:

What is known as the Dutch disease?

Differences in the productivity of labor account for comparative advantage if:

Though the countries can benefit by completely specializing in the production of the good in which they have comparative advantage, in real world however, they do not completely specialize.

The export supply and import demand curves measure the domestic shortage and surplus, respectively, at different world prices.

The table below shows units of wheat and cloth produced by each worker per day in both the countries. Table 20.1 -Refer to Table 20.1. Which of the following statements is true?

We benefit from trade if we are able to obtain a good from a foreign country by giving up more of other goods than we would have to give up to obtain the good at home.

Workers in industrial countries earn much higher wages than workers in developing countries because:

The data in the table below assumes that with the same quantity of resources, both Australia and Philippines produces food and computers. Australia can make 1,000 computers or 2,000 units of food in a day, and the Philippines can make 200 computers or 1,200 units of food in a day. Table 20.2 -According to Table 20.2, what is the opportunity cost of 1 computer in Australia?

The human skills theory is similar to the factor abundance theory of explaining the source of comparative advantage, except that the former concentrates only on different aspects of labor.

According to the Heckscher-Ohlin model:

Scenario 20.2 Suppose labor productivity differences are the only determinants of comparative advantage, and both Egypt and produce only corn and cocoa. In Egypt, 10 bushels of corn or 15 pounds of cocoa can be produced in a day. In Ghana, one day of labor can be used to produce either 2 bushels of corn or 8 pounds of cocoa. -Based on Scenario 20.2, which of the following terms of trade would benefit both countries?