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

What are three primary reasons for the growth of international trade over the past 50 years?

Economists believe the most persuasive argument for protectionism is to

When Americans increase their demand for Japanese goods

Table 19-11 Output per hour Production and Production of work Consumption without Trade with Trade Clocks Hats Clocks Hats Clocks Hats Denmark 6 3 900 150 1,200 0 Belize 1 2 150 100 0 400 Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 19-11 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-11.All of the following are terms of trade that could possibly benefit both countries except

Which of the following is not an example of a trade restriction?

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

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

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. a.Which country has an absolute advantage in the production of both light bulbs and flash drives? b.Which country has a comparative advantage in the production of light bulbs? c.Which country has a comparative advantage in the production of flash drives?

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.If the tariff was replaced by a quota which limited rice imports to 16 million pounds,the amount of additional revenue received by rice importers would equal

Countries gain from specializing in producing goods in which they have ________ and trading for goods in which other countries have ________.

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.For the U.S.steel industry,a "Buy American" provision would create gains for all of the following except

Currency traders expect the value of the dollar to fall.What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

Table 19-2 Pies Cakes Sarita 15 25 Gabriel 12 16 Sarita and Gabriel own S&G Bakery. Table 19-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 19-2.Select the statement that accurately interprets the data in the table.

Table 19-5 Empanadas Tacos Madison 30 50 Austin 24 32 Madison and Austin own Cafe Ole'. Table 19-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 19-5.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.

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.The loss in domestic consumer surplus as a result of the tariff is equal to the area

Which of the following is the best example of a voluntary export restraint?

Pakistan has developed a comparative advantage in the production of clothing.The source of its comparative advantage in this product is

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?

Figure 19-1 Figure 19-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 19-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $18.What is the value of domestic producer surplus?