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

Goods and services bought domestically but produced in other countries are referred to as

If a country has a ________ exchange rate,its central bank must buy and sell its holdings of currencies to maintain a given exchange rate.

Measuring the impact of a quota or tariff on the U.S.economy is an example of ________.Stating that a quota or tariff should be eliminated is an example of ________.

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.What will the market price be?

When Roxanne,a U.S.citizen,purchases a designer dress from Barneys of New York that was made in Milan,the purchase is

Table 19-3 Candles Soap Bryce 150 450 Tina 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.

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.

Which of the following will shift the demand for the euro to the right?

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.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 ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

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?

What does it mean for a country to have an absolute advantage in producing a product?

Which of the following statements is false?

The ratio at which a country can trade its exports for imports from other countries is called comparative advantage.

Exports are domestically produced goods and services

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 gain compared to the "without trade" numbers?

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.

Which of the following is the best example of a tariff?

Which of the following is the best example of a quota?

Table 19-3 Candles Soap Bryce 150 450 Tina 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.