Exam 19: Comparative Advantage, international Trade, and Exchange Rates

A real appreciation of the dollar is caused by either a nominal appreciation of the dollar,a rise in the foreign price level,or a fall in the U.S.price level.

Goodyear's sales were negatively affected by the tariff on Chinese tires because

If the dollar appreciates against the Mexican peso

When the market value of the dollar falls relative to other currencies around the world,we say that

Table 19-12 Production and Consumption Production Without Trade With Trade Swards Beltr Svards Beltr Estoria 100 50 200 0 Morocco 50 40 0 120 Estonia and Morocco can produce both swords and belts.Table 19-12 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-12.If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,how many swords will Morocco consume?

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.With a quota in place,what is the quantity consumed in the domestic market?

A quota is

Figure 19-9 Bragabong currently both produces and imports almonds.The government of Bragabong decides to restrict international trade in almonds by imposing a quota that allows imports of only 10 million kilos each year.Figure 19-9 shows the estimated demand and supply curves for almonds in Bragabong and the results of imposing the quota. -Use Figure 19-9 to answer questions a-j. a.If there is no quota what is the domestic price of almonds and what is the quantity of almonds demanded by consumers? b.If there is no quota how many kilos of almonds would domestic producers supply and what quantity would be imported? c.If there is no quota what is the dollar value of consumer surplus? d.If there is no quota what is the dollar value of producer surplus received by producers in Bragabong? e.If there is no quota what is the revenue received by foreign producers who supply almonds to Bragabong? f.With a quota in place what is the price that consumers of Bragabong must now pay and what is the quantity demanded? g.With a quota in place what is the dollar value of consumer surplus? Are consumers better off? h.With a quota in place what is the dollar value of producer surplus received by producers in Bragabong? Are domestic producers better off? i.Calculate the revenue to foreign producers who are granted permission to sell in Bragabong after the imposition of the quota. j.Calculate the deadweight loss as a result of the quota.

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.Without the quota,the domestic price of peanuts equals the world price which is $2.00 per pound.What is the quantity of peanuts demanded by domestic consumers in the absence of a quota?

Table 19-6 Saddles Spurs (pairs) Mateo 75 225 Celeste 100 225 Mateo and Celeste produce custom saddles and spurs.Table 19-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 19-6.Select the statement that accurately interprets the data in the table.

Table 19-4 Berries Fish Rob 20 80 Bill 30 60 Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and make their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced. -Refer to Table 19-4.Use the table above to select the statement that accurately interprets the data in the table.

Figure 19-2 Suppose the U.S.government imposes a $0.40 per pound tariff on rice imports.Figure 19-2 shows the impact of this tariff. -Refer to Figure 19-2.As a result of the tariff,domestic producers increase their quantity supplied by

Table 19-4 Berries Fish Rob 20 80 Bill 30 60 Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and make their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced. -Refer to Table 19-4.Use the table above to select the statement that accurately interprets the data in the table.

Table 19-3 Candles Sapp Bryce 150 450 Tiraa 200 450 Bryce and Tina are artisans who produce homemade candles and soap.Table 19-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 19-3.Select the statement that accurately interprets the data in the table.

Once a country has a comparative advantage in producing a product,it cannot lose that advantage.

Currency traders expect the dollar to depreciate.What impact will this have on equilibrium in the foreign exchange market?

At the beginning of 2013,with the tariff on Chinese tires having expired,Goodyear's profits ________ compared to the previous year,and Chinese tire imports ________.

In the past two decades the United States lost its comparative advantage in automobiles to Japan.What factor was most responsible for the development of Japan's comparative advantage in automobiles?

Which of the following statements is false?

What is dumping? Who benefits and who loses from dumping?