Exam 17: International Trade

Use the following to answer question(s): Production Possibilities in Alphaland and Omegaland -(Exhibit: Production Possibilities in Alphaland and Omegaland) At point A in Alphaland, ________ additional computer(s) cost(s) _______ additional car(s) and at point A? in Omegaland, _______ additional computer(s) cost(s) _______ car(s).

Use the following to answer question(s): The Production of Tires and Radios -(Exhibit: The Production of Tires and Radios) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of tires each country would have to forgo in order to produce the additional radios indicated.Further assume that the only input is labor and that it remains fully employed.We see from the table that Country Y:

Which of the following statements is true?

A protectionist policy restricts free trade.

The expression "terms of trade" refers to the:

If a country removes a tariff on imported shoes, we expect the domestic price of shoes to _______ and the quantity of shoes consumed in the domestic market to ________ .

The "increase domestic employment" argument for protection against free trade:

Discuss and evaluate the following statement: "Importing goods from foreign nations clearly results in a loss of U.S.jobs.It is also clear to me that the restriction of foreign imports from other nations will result in a saving of our own workers' jobs.I just cannot see any reasons for the excitement people have for free trade arguments."

Use the following to answer question(s): Production Possibilities Curve -(Exhibit: Production Possibilities Curve) Which of the following statements is true?

A new domestic industry with potential economies of scale is called a(n):

If a country imposes a tariff on imported shoes, we expect the domestic price of shoes to _______ and the quantity of shoes consumed in the domestic market to _______ .

An argument against the use of tariffs to keep out the production of "cheap" foreign labor is that:

Gains of trade are possible for two countries if they have:

Use the following to answer question(s): Production Possibilities Curve -(Exhibit: Production Possibilities Curve) In order to maximize output, this economy must:

Use the following to answer question(s): Production Possibilities Schedule for Two Commodities -(Exhibit: Production Possibilities Schedule for Two Commodities) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of commodity X each country would have to forgo to produce the additional units of commodity Y indicated.Further assume that the only input is labor and that it remains fully employed.We see from the table that the United States:

Suppose that Brazil and Peru exchange coffee and leather.Brazil can produce both coffee and leather more efficiently than Peru, but Brazil can produce coffee more efficiently than leather.Comparative advantage states that:

The absolute value of the slope of the production possibilities curve at any point:

Use the following to answer question(s): Heartland and Soulland Suppose that there are only two countries in the world, Heartland and Soulland.The two countries produce only two goods, corn and drill presses.At its current level of production, Heartland must give up production of 1/4 drill press to produce an additional 100 bushels of corn.Soulland must give up 1 drill press to produce an additional 100 bushels of corn.No trade now occurs between the two economies, and both economies are operating on their respective production possibilities frontiers. -(Exhibit: Heartland and Soulland) The country with a comparative advantage in the production of drill presses is:

A direct restriction on the quantity of an import is called a tariff.

Opportunities created by trade: