Exam 17: International Trade

A new industry with potential economies of scale is called:

A policy aimed at promoting the development of specific industries within a country that may increase domestic welfare through trade with the rest of the world is known as a(n):

International exchange in which countries are either exporters or importers of a good, but do not do both, is called _______ trade.

Restrictions on free international trade designed to protect domestic industries from competitive market forces that originate beyond the borders of the country are:

Free trade is beneficial because it allows total world output to be reduced.

A tariff is most likely to _______ prices and _______ consumption of the good or service being protected.

Canada, Mexico, and the United States have:

Free trade is harmful because it leads to increased competition.

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

A country with a lower relative cost of production of a particular good has a(n) _______ advantage and it is likely to _______ this good.

Taken collectively, people in nations that engage in international trade are not likely to:

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:

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

If the _______ differ between two countries, this suggests the possibility for mutually advantageous trade.

Use the following to answer question(s): Production Possibilities for Machinery and Petroleum -(Exhibit: Production Possibilities for Machinery and Petroleum) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of machinery each country would have to forgo in order to produce the additional petroleum indicated.A terms-of-trade equation that could emerge as a result of trade between the two countries is:

The concept of comparative advantage leads to the conclusion that:

A country with a lower relative cost of production of a particular good has a comparative advantage.

The average tariff imposed on dutiable imports in the United States is about _______ percent.

Use the following to answer question(s): Production Possibilities for Machinery and Petroleum -(Exhibit: Production Possibilities for Machinery and Petroleum) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of machinery each country would have to forgo in order to produce the additional petroleum indicated.A terms-of-trade equation that could emerge as a result of trade between the two countries is:

Use the following to answer question(s): Production Possibilities for Machinery and Petroleum -(Exhibit: Production Possibilities for Machinery and Petroleum) Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of machinery each country would have to forgo in order to produce the additional petroleum indicated.The opportunity cost in the United States of producing 120 units of machinery is _______ units of petroleum.