Exam 13: International Trade

Below is production possibilities data for the countries of Mental and Etheric. -Refer to the information above to answer this question.What is the opportunity cost of one unit of rice cakes in Etheric?

Below are the production possibilities (without trade)and the trading possibilities (with free trade)for Canada. -Refer to the graph above to answer this question.Assuming free trade,what is the opportunity cost of 1 more railcar?

What is the formula for the terms of trade?

What is the cornerstone of trade?

What is the definition of "the terms of trade"?

Below is the productivity per worker (kilos per day)in the wheat and bean industries of Caledonia and Ibrox.The working population in each country is 16 million people. -Refer to the data above to answer this question.Suppose that initially each country was self-sufficient in the two products and employed half of their working populations in each industry.If subsequently each country were to totally specialize in the product in which it has a comparative advantage,what would be the subsequent gains from trade?

Table 13.14 shows the output of kumquats per month. -Suppose that the productivity per worker in the crude oil and natural gas industries of Westland and Eastland are as follows: a)Which country has the absolute advantage in producing crude oil? b)Which country has the absolute advantage in producing natural gas? c)Which country has the comparative advantage in producing crude oil? d)Which country has the comparative advantage in producing natural gas? e)According to the theory of comparative advantage,will there be trade? If yes,what is the direction of trade?

-Refer to above figure to answer this question.What do the comparative opportunity costs in the two countries suggest?

Figure 9.10 shows the market for cloth in Smith Island. -Refer to Figure 9.10 to answer this question.At the world price,how much is Smith Island trading?

All of the following,except one,are benefits of free trade.Which is the exception?

Below is the total market demand and supply of wine for France and Germany.Quantities are in millions of litres per month. -Refer to the information above to answer this question.Assuming no trade,what are the equilibrium price and quantity of wine in France?

What is the term for a limit which is imposed on the production or sale of a product?

Below is production possibilities data for the countries of Mental and Etheric. -Refer to the information above to answer this question.Suppose that each country specializes in the product in which it has a comparative advantage.What will be the total output of each product?

What is a tariff?

Table 13.14 shows the output of kumquats per month. -Suppose that the productivity per worker in the caviar and salmon industries of Canada and Russia are as follows: a)Which country has the absolute advantage in producing caviar? b)Which country has the absolute advantage in producing salmon? c)Which country has the comparative advantage in producing caviar? d)Which country has the comparative advantage in producing salmon? e)According to the theory of comparative advantage,will there be trade? If yes,what is the direction of trade?

Who was the originator of the Theory of Absolute Advantage?

Below is some data on the output of kumquats in Smith Island. -Refer to information above to answer this question.If the world price (free trade)price prevailed,how many kumquats per month would Smith Island import?

Table 13.14 shows the output of kumquats per month. -Which of the following statements about the impact of the introduction of free trade is correct?

Below is some hypothetical data for the countries of Canada and Mexico.(Assume that Canada has 10 million workers per month available and Mexico has 20 million. ) Canada's Production Possibilities (Output in millions of bushels per month) Mexico's Production Possibilities (Output in millions of bushels per month) Output Before Trade (Output in millions of bushels per month) -Refer to the information above to answer this question.What is the output per worker in Canada in the rye and bean industries respectively?

What are currency exchange controls?