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

A quota is the same as a voluntary export restraint.

The United States has developed a comparative advantage in digital computers,airliners and many prescription drugs.The source of its comparative advantage in these products is

Table 19-11 Production and Consumption Production Without Trade With Trade Clucks Huts Clocks Hats Derrnark 900 150 1,200 0 Belize 150 100 0 400 Denmark and Belize can produce both clocks and hats.Table 19-11 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-11.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Denmark consume?

Imports are goods and services bought domestically

Table 19-11 Production and Consumption Production Without Trade With Trade Clucks Huts Clocks Hats Derrnark 900 150 1,200 0 Belize 150 100 0 400 Denmark and Belize can produce both clocks and hats.Table 19-11 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-11.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Belize consume?

What is the difference between imports and exports?

As a percentage of GDP,imports are greater than exports for which of the following countries?

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries

Once an industry becomes established in a certain area firms that locate in that area gain advantages over firms located elsewhere,leading to lower costs of production.Economists refer to the lower costs that result from increases in the size of an industry in a certain area as

Table 19-11 Production and Consumption Production Without Trade With Trade Clucks Huts Clocks Hats Derrnark 900 150 1,200 0 Belize 150 100 0 400 Denmark and Belize can produce both clocks and hats.Table 19-11 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-11.Prior to trade,what was the opportunity cost to produce 1 clock in Denmark?

A tariff is a tax imposed by a government on

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.With trade,what is the total gain in sword production?

If the exchange rate between the Mexican peso and the U.S.dollar expressed in terms of pesos per dollar is 13.5 pesos = 1 dollar,what is the exchange rate when expresses in terms of dollars per peso?

Figure 19-8 Suppose the U.S.government imposes a $0.50 per pound tariff on sugar imports.Figure 19-8 shows the demand and supply curves for sugar and the impact of this tariff. -Use Figure 19-8 to answer questions a-i. a.Following the imposition of the tariff,what is the price that domestic consumers must now pay and what is the quantity purchased? b.Calculate the value of consumer surplus with the tariff in place. c.What is the quantity supplied by domestic sugar producers with the tariff in place? d.Calculate the value of producer surplus received by U.S.sugar producers with the tariff in place. e.What is the quantity of sugar imported with the tariff in place? f.What is the amount of tariff revenue collected by the government? g.The tariff has reduced consumer surplus.Calculate the loss in consumer surplus due to the tariff. h.What portion of the consumer surplus loss is redistributed to domestic producers? To the government? i.Calculate the deadweight loss due to the tariff.

If the dollar depreciates against the Indian rupee

Table 19-11 Production and Consumption Production Without Trade With Trade Clucks Huts Clocks Hats Derrnark 900 150 1,200 0 Belize 150 100 0 400 Denmark and Belize can produce both clocks and hats.Table 19-11 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-11.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Belize consume?

If the exchange rate changes from $2.00 = 1 euro to $1.98 = 1 euro then

As a percentage of GDP,exports are greater than imports for which of the following countries?

Table 19-9 Output Per Hour of Work Light Bulbs Flash Drives Mexico 20 5 Canada 8 32 Table 19-9 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada. -Refer to Table 19-9.Fill in the following table with the opportunity costs of producing light bulbs and flash drives for Mexico and Canada. Light Bulbs Flash Drives Mexico Canada

Is the value of U.S.exports is typically larger or smaller than the value of U.S.imports.