Exam 8: Trade

Scenario: The following figure shows the demand curve, D, and the supply curve, S, of chairs in Barylia. Barylia is open to free trade. The world price of chairs is $3, and the government of Barylia decides to impose a $1 tariff on the import of chairs. -Refer to the scenario above.What is the consumer surplus when Barylia engages in trade and the government imposes a $1 tariff on chairs?

The domestic supply and demand of a product in Canada is given in the following figure. -Refer to the figure above.If the world price of this product is $1 and Canada engages in free trade,Canada will ________.

Points inside a production possibilities curve are ________ and ________.

Which of the following correctly identifies an argument against free trade?

The following figure illustrates the production possibilities curve of a farmer who has to decide on the quantities of wheat and rice to produce for a given amount of resources.Three possible production combinations-A,B,and C-are marked on the figure. a)Which of the three combinations of wheat and rice,marked on the graph,is both efficient and attainable? Explain your answer. b)Calculate the opportunity cost of producing both wheat and rice.

Which of the following can be a source of a country's comparative advantage?

In Lithasia,the opportunity cost of producing a chair is 2 tables and in Barylia,the opportunity cost of producing a chair is 1/2 table.Which of the following statements is true?

Iowa produces a small amount of wool but buys a large quantity of wool from Montana for use in its (Iowa's)textile industry.Iowa is ________.

Even though points inside a production possibilities curve are attainable,why are they not preferred?

Which of the following causes an outward shift in the Production Possibilities Curve?

The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia in four different scenarios. Barylia is open to free trade. -Refer to the figure above.Let the world price of calculators be $5.In what scenario(s)does Barylia become a net importer of calculators?

"Banana republics" refer to nations that ________.

The figures below show markets for solar panels and textiles in Banana Republic. Pwₒᵣld is the world price in each market. -Refer to the figures above.When Banana Republic opens up to international trade,the domestic sellers in the textile market ________.

Scenario: Now suppose the United States continues to trade wheat freely with the rest of the world but that the world price is $6 per bushel, as shown in the figure below. -Refer to the scenario above.The gain in producer surplus from free trade at the world price of $6 per bushel is represented by area ________.

Scenario: Yasmin and Zeek are lawyers working at V, W, and X LLP. Yasmin works 48 hours a week, and Zeek also works 48 hours a week. They handle two types of cases, intellectual property (IP) cases and corporate fraud (CF) cases. It takes Yasmin 6 hours to handle each IP case and 4 hours to handle each CF case. Zeek can finish an IP case in 3 hours and a CF case in 6 hours. -Refer to the scenario above.If you draw the production possibilities curves (PPCs)of the two lawyers where the number of IP cases handled is measured on the x-axis,then ________.

Protectionism leads to ________.

Points on a production possibilities curve are ________ and ________.

Scenario: Hawaii and South Carolina are trading partners. Hawaii has an absolute advantage in the production of both coffee and tea. The opportunity cost of producing 1 pound of tea in Hawaii is 2 pounds of coffee, and the opportunity cost of producing 1 pound of tea in South Carolina is 1/3 pound of coffee. -Refer to the scenario above.Which of the following statements is true of the terms of trade of tea for coffee?

The following figure shows the production possibilities curve for a software engineer who has to divide her available time between producing computer programs and Web sites. -Refer to the figure above.If the engineer spends her entire time producing computer programs,how many computer programs can she produce?

The following figure shows the demand curve, D, and supply curve, S, of ballpoint pens in Lithasia. The world price of pens is $2. -Refer to the figure above.What is the domestic demand for pens in Lithasia after the economy opens up to free trade?