Exam 15: International Trade and Trade Policy

Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of berries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. In a closed economy, if the citizens of this island consume 1,200 fish per year, how many pounds of berries can they consume?

The production possibility curve (PPC)shows the ________ production of one good for ________ production level of the other good.

The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy is open to trade, and the world price of a car is $6,000, how many cars will be imported?

An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Ricardo to produce one shirt?

If this is a closed economy how many cars will be exchanged?

An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Jen to produce one radio?

If the domestic quantity supplied of a good is greater than the domestic quantity demanded, the country is likely to be a(n)

Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. Mike's opportunity cost of producing one pound of cheese is ________ car(s).

If a country is a net importer of a good, the price of that good will ________ when the economy goes from closed to open for trade.

The increase in the price of sugar created by the tariff will lead domestic consumption to fall by ________ tons per year, compared to when the economy is open without the tariff.

Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of berries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. In a closed economy, who has the comparative advantage in catching fish?

An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the most of each good that can be produced each day if each worker fully specializes according to his/her comparative advantage?

The United States imports shoes from third world countries. This means that if the U.S. economy were closed, the domestic price of goods would be ________ the world price of shoes.

The following graph shows the production possibilities curve for the economy with only two members, Silvia and Art. Silvia can produce either 50 pounds of beef or 2 computers per week, and Art can produce 100 pounds of beef or 1 computer per week. Both of them work 40 weeks per year. Art's opportunity cost of producing one pound of beef is ________ computer(s).

A tariff is a tax imposed on ________ good.

If this is an open economy, quantity supplied of cars by the domestic producers will be ________.

Refer to the following graph. The maximum amount of good A can be consumed in this economy without trade is

The increase in the price of sugar created by the tariff will lead domestic production to increase by ________ tons per year, compared to when the economy is open without the tariff.

If Utopia has a closed economy, the price of tile is $________ per case, and if it has an open economy the price of tile is $________ per case.

If this is a closed economy, how much will a bushel of corn cost?