Exam 8: Trade

The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia. The world price of calculators is $40. -Refer to the figure above.What is the domestic price of calculators in Barylia?

What is meant by the world price of a good? How do the domestic price and the world price of a good together determine whether a country will be an importer or an exporter of the good?

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 opens up to free trade?

The following figure shows the production possibilities curves (PPCs) of two individuals, Ryan and Tom. -Refer to the figure above.Which of the following statements is true?

The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia. The world price of calculators is $40. -Refer to the figure above.What is the total surplus after Barylia opens up to free trade?

The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia. The world price of calculators is $40. -Refer to the figure above.Which of the following explains the impact on the domestic buyers and sellers when the country opens to free trade?

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 price of pens in Lithasia?

The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia. The world price of calculators is $40. -Refer to the figure above.What is the producer surplus after Barylia opens up to free trade?

The following figure shows the demand curve, D, and the supply curve, S, for calculators in Barylia. The world price of calculators is $40. -Refer to the figure above.If Barylia does not engage in international trade,what is the production of calculators in the country?

The production possibilities schedules and curves for farms in Idaho and Iowa are shown below. ________ has the absolute advantage in producing alfalfa and ________ has the absolute advantage in producing corn.The state with the lower opportunity cost for producing a ton of alfalfa is ________,so the state with the comparative advantage in producing alfalfa is ________.

Two countries,A and B,produce Good X.Which of the following statements is true of the trading price of Good X?

Scenario: You learned in the textbook that protectionism via an imposed tariff is not free, since it interferes with market equilibrium and leads to a loss of social surplus in that market. A rationale for imposing a tariff is to shield domestic firms in a particular industry from foreign competition. But what if domestic firms that export goods and services rely on imported inputs in their production? The pie charts below shows that most U.S. exporters are also importers and vice versa. (Source: J. Bradford Jensen, Importers are Exporters: Tariffs Would Hurt Our Most Competitive Firms, Trade and Investment Policy Watch, Peterson Institute of International Economics, December 7, 2016, https://piie.com/blogs/trade-investment-policy-watch/importers-are-exporters-tariffs-would-hurt-our-most-competitive.) -Refer to the scenario above.Which of the following is a likely effect of a tariff on imported steel in the United States (a steel importing country)?

Which of the following statements is true?

The following figure shows the production possibilities curves (PPCs) of two individuals, Ryan and Tom. -Refer to the figure above.Which of the following statements is true?

How are the domestic sellers and buyers of a good affected if a country starts importing the good?

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.What is Zeek's opportunity cost of handling a CF case?

A production possibilities curve shows the ________.

Points outside a production possibilities curve are ________.

The figure below shows the potential gains from specialization for farms in Idaho and Iowa. -Refer to the figure above.Under specialization,Idaho produces ________ and Iowa produces ________.

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 producer surplus when Barylia engages in trade and the government imposes a tariff of $1 on chairs?