Exam 8: Trade

The following figure depicts the production possibilities curve when Ann and Bob engage in trade. With all her resources, Ann can either produce two computer programs or one Web site. With all his resources, Bob can either produce one computer program or three Web sites. -Refer to the figure above.The steeper portion of this curve has a slope equal to ________.

The figure below shows the domestic supply and demand of a product in the United States. -Refer to the figure above.If the world price of this product is $14,the consumer surplus in the United States before free trade is equal to ________ ,and the consumer surplus after free trade will equal ________.

The following figure shows the production possibilities curve for Sheena, who has to split her time between producing Web sites and computer programs. -Refer to the figure above.What is the opportunity cost of producing 1 computer program?

Which of the following cannot be a source of a country's comparative advantage?

Which of the following statements is true?

Scenario: With her available resources, Wendy can produce 20 greeting cards or 10 earrings. Sarah, with the resources she has, can produce 5 greeting cards or 15 earrings. -Refer to the scenario above.What is Sarah's opportunity cost of producing 1 earring?

The following table shows the value of exports and imports of four countries in 1990. -Refer to the table above.Which of the following statements is true?

Scenario: Suppose the world price is $2 per bushel, and U.S. wheat growers are dissatisfied with the level of wheat imports into the United States. They lobby Congress for a $1 per bushel tariff on imported wheat. The following figure shows the U.S. wheat market. -Refer to the scenario above.How much wheat is imported into the United States after the imposition of the tariff?

Which of the following statements is true?

The figure below shows the production possibilities curves (PPCs)for Viola and Davis.Which of the lines in the graph correctly represents their joint PPC?

The figure below shows the domestic supply and demand of a product in the United States. -Refer to the figure above.Suppose the world price of this product is $8.After the United States engages in free trade in this product,________.

Which of the following statements is true?

Taxes levied on goods and services transported across political boundaries are referred to as ________.

Scenario: Suppose the world price is $2 per bushel, and U.S. wheat growers are dissatisfied with the level of wheat imports into the United States. They lobby Congress for a $1 per bushel tariff on imported wheat. The following figure shows the U.S. wheat market. -Refer to the scenario above.The tariff revenue collected by the U.S.government is represented by which area in the figure?

Which of the following correctly identifies an argument against free 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.Calculate the total surplus in Barylia under free trade.

An import is any good that is ________.

Which of the following statements is not true of free trade?

The following table shows the quantity of wine or cloth that can be produced in California and Texas when all the resources are devoted to the production of each good.The states have identical resources. Refer to the table above.Identify the absolute and comparative advantage enjoyed by both states.Which state should specialize in the production of which good? Determine the range of terms of trade between the two states.

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?