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

Each year,the United States exports about 50 percent of its wheat crop.

Imports are goods and services bought domestically but produced in other countries.

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 prepare 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.With the tariff in place,the United States consumes

A tax imposed by a government on imports of a good into a country is called a

Table 19-12 Output per hour Production and Production of work Consumption without Trade with Trade Swords Belts Swords Belts Swords Belts Estonia 5 3 100 40 200 0 Morocco 2 2 60 60 0 120 Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 19-12 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-12.Which country has an absolute advantage in producing belts?

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.

Assume that Australia has a comparative advantage in producing surfboards and New Zealand imports surfboards from Australia.We can conclude that

If the opportunity costs of production for two goods is different between two countries,then

Table 19-12 Output per hour Production and Production of work Consumption without Trade with Trade Swords Belts Swords Belts Swords Belts Estonia 5 3 100 40 200 0 Morocco 2 2 60 60 0 120 Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 19-12 shows the output per hour of work, 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 50 belts are traded,how many belts will Morocco consume?

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

Table 19-12 Output per hour Production and Production of work Consumption without Trade with Trade Swords Belts Swords Belts Swords Belts Estonia 5 3 100 40 200 0 Morocco 2 2 60 60 0 120 Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 19-12 shows the output per hour of work, 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 50 belts are traded,how many swords will Morocco consume?

China has developed a comparative advantage in the production of children's toys.The source of this comparative advantage is

When Sophie,a French citizen,purchases a Dell computer in Paris,France that was produced in Texas,the purchase is

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.What is the opportunity cost to produce 1 clock in Belize?

How does a decrease in value of a country's currency relative to other currencies affect its balance of trade?

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

If the dollar appreciates,how will aggregate demand in the United States be affected?

If there is currently a surplus of dollars,which of the following would you expect to see in the foreign exchange market?

Figure 19-4 Figure 19-4 shows the U.S. demand and supply for leather footwear. -Refer to Figure 19-4.Under autarky,the equilibrium price is