Exam 16: The United States and the Global Economy

Figure 16.1 Import Tariff Levied by Venezuela -Consider Figure 16.1. With a per-unit tariff of $3, Venezuela produces ______, consumes ______, and imports ______.

All of the following are justifications for import tariffs except

To maximize its gains from trade, the U.S. should export goods and services for which it has an absolute advantage.

Import tariffs introduce inefficiencies by encouraging the overproduction of goods for which a country has a comparative advantage.

Seekers of trade restrictions are often

If Canada and Mexico have identical opportunity costs of producing wheat and apples, then there will not be any basis for gainful specialization and trade according to the principle of absolute advantage.

Which one of the following groups of Americans does not benefit from free trade?

Trade between Canada and Mexico allows both countries to gain because they can consume a combination of goods and services that lies

It is possible for a high-wage country such as the U.S. to export labor-intensive goods to a low-wage country such as China.

Supporters of tariffs and other trade restrictions believe that "infant industries"

According to the principle of comparative advantage, Canada exports those goods and services for which it has a low

Assume that wages in the U.S. are five times as high as wages in Mexico. The U.S. will export labor-intensive goods to Mexico if the productivity of its labor force is more than five times as high as the productivity of the Mexican labor force.

The degree to which specialization can be practiced is limited the most by the

According to the principle of ______, a country will gain from specializing in those goods that it can produce relatively cheaply.

Figure 16.1 Import Tariff Levied by Venezuela -Consider Figure 16.1. With free trade, Venezuela produces ______, consumes ______, and imports ______.

Canada, Japan, and Mexico are the leading trading partners of the U.S.

A difference between a quota and a tariff is that

When import tariffs are imposed by the U.S., the

Babe Ruth was great at both pitching and hitting. He even became the best left-handed pitcher in the American League. However, he eventually gave up pitching and became a legendary hitter for the N.Y. Yankees. This was because he

When compared to quotas, tariffs have a relatively small effect on the domestic price of the good.