Exam 7: Global Markets in Action

Two arguments used to promote trade barriers are the infant-industry argument, and the dumping argument. Explain each of these arguments and evaluate whether each one has any flaws.

Dumping occurs when a foreign firm ________.

The reason that average labor costs are higher in the United States than in Haiti is that

A key difference between tariffs and quotas is that

The figure shows the market for helicopters in the United States, where D is the domestic demand curve and S is the domestic supply curve. The United States trades helicopters with the rest of the world at a price of $36 million per helicopter. -In the figure above, with international trade U.S. companies buy ________ helicopters per year.

How does a tariff affect the government's revenue? How does an import quota affect the government's revenue?

Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. These exports mean that

Tariffs ________ the domestic price of the good and import quotas ________ the domestic price of the good.

In 2008, Agriculture Secretary Ed Schafer announced that Chile's Livestock and Agricultural Service approved the U.S. inspection, control and certification systems for poultry, allowing these products to enter the Chilean market. What is NOT an effect of this change in Chilean policy on the Chilean poultry market?

Tariffs and import quotas differ in that

Tariffs ________ consumer surplus and import quotas ________ consumer surplus.

The average tariff rate imposed by the United States on imported goods

The (false) idea that an industry should be protected because of learning-by-doing until it is large enough to compete successfully in world markets is the ________ argument for protection.

Usually the imposition of trade barriers affecting a particular good benefits ________ people domestically, each of whom gains a ________.

Based on the table below, at what world price would the country import the good?

During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. Based on this, we know definitively that

A country opens up to trade and imports clothing. In the clothing market, surplus has been redistributed from

A country opens up to trade and becomes an exporter of wheat. In the wheat market, consumer surplus will ________, producer surplus will ________, and total surplus will ________.

Which of the following statements is TRUE?

When the principle of comparative advantage is used to guide trade, then a country specializes in producing only