Exam 31: Macro Only: International Trade Policy

Refer to the figure below to answer the following questions. The figure shows the market for helicopters in Canada, where D is the domestic demand curve and S is the domestic supply curve. Canada trades helicopters with the rest of the world at a price of $36 million per helicopter. Figure 31.1.2 -In Figure 31.1.2, with international trade Canadian firms buy ________ helicopters per year.

Suppose that the world price of eggs is $1 a dozen, Canada does not trade internationally, and the equilibrium price of eggs in Canada is $3 a dozen. Then Canada begins to trade internationally. Canadian farmers produce ________ eggs. Canada ________ eggs.

In a market that moves from a situation of no trade to a situation where a good is imported, the price of the good ________ and the quantity produced by the domestic industry ________.

Choose the statement that is incorrect.

Which of the following statements concerning tariffs is NOT true?

Economists usually agree with which of the following arguments that favour protectionism?

Consider a market that sells some of its goods as exports. Who does NOT benefit?

A market is open to international trade. At the world price, the quantity demanded is 150 units and the quantity supplied is 200 units. This country will

If Canada imposes a tariff of $1 per imported shirt, the tariff

A difference between a quota and a tariff is that

The most efficient way to encourage the growth of an infant-industry is through

________ specifies the maximum amount of a good that may be imported in a given period of time.

Table 31.1.1 Glazeland's Doughnut Market -Table 31.1.1 shows Glazeland's doughnut market before international trade. Glazeland opens up to international trade. If the world price is $0.40, then Glazeland will produce ________ doughnuts and will ________ doughnuts.

Canada produces both lumber and wine. Canada exports lumber and imports wine. The rest of the world imports Canadian lumber and exports wine to Canada. Canada has a comparative advantage in producing ________. The rest of the world has a comparative advantage in producing ________.

Use the information below to answer the following questions. Fact 31.3.1 Before 1995, trade between Canada and Mexico was subject to tariffs. In 1995, Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed. -Refer to Fact 31.3.1. With the removal of the tariffs, the quantity of Canadian imports from Mexico ________ and the quantity of Canadian exports to Mexico ________.

________ occurs when a foreign firm sells its exports at a lower price than its cost of production.

A country opens up to trade. In an export industry,

If a quota is set at the same quantity of imports that results from a tariff in Country A,

Table 31.3.1 Canada's Market for Widgets -Table 31.3.1 shows the Canadian supply of and demand for widgets. Widgets are available on the world market for $7. If the Canadian government imposes a tariff of $1, the domestic selling price will be ________ and quantity bought will be ________.

The fundamental force that drives international trade is