Exam 34: International Trade and Comparative Advantage

"The United States has more oil in Alaska than there is oil in Kuwait. Therefore, the United States should stop importing oil." Evaluate this statement using economic analysis.

Japan and China produce guns and rice. The country with the lowest opportunity cost of guns (in terms of rice) will

Figure 34-7 In Figure 34-7, CF has the same slope as BG. AB and CD are the production possibilities of Pestoland and Pastaland, respectively. If both countries are given the opportunity to trade at prices indicated by CF,

Suppose that a tariff is imposed on imports of minivans. Show graphically what the effect is in terms of price and quantity of imports. Be sure that your graph is completely and correctly labeled. What determines how much of the tariff is paid by the buyers of the minivans?

A tariff is a tax on imports.

Table 34-2 Using the data from Table 34-2, suppose England transfers 2 units of labor from wine to cloth and Portugal transfers 1 unit from cloth to wine. The combined production of wine and cloth will be increased by

If a nation has an absolute advantage in the production of some commodity, it

Discuss national defense, infant industry, and strategic trade as arguments for protection.

A program of protection that results in preserving jobs in certain industries

Trade between two nations is complicated by

The quantity supplied by domestic producers in an importing country must be less than the quantity demanded by its population.

Compare and contrast the effects of a quota and a tariff on imports. Be sure to include both short-run and long-run effects in your answer.

Which of the following is true?

The United States can produce 1,000 shoes if it specializes in shoe production. Alternatively, it can produce 500 shirts. Taiwan can produce 500 shoes or 200 shirts. Explain which country will specialize in shoe production and which in shirt production. What are the possible terms of trade?

Is the call for protection on the basis of national defense valid?

The U.S. Constitution

An import quota on a product normally does all of the following except

The effect of an import quota is to

Figure 34-5 From the graph in Figure 34-5 (curves show output per unit of labor input), one can infer that

An essential point, among many, in the refutation of the "cheap foreign labor" argument is that