Exam 9: Comparative Advantage and the Gains From International Trade

In the United States during the Great Depression,tariffs were ________ than they were following World War II,and ________ than they are today.

In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.All of the following are reasons for this except

The first example of comparative advantage appeared in a book that was published in 1817.This example showed that mutually beneficial trade between two countries (England and Portugal)was possible.The example assumed that two goods (wine and cloth)could be produced by both countries.Which of the following describes the conclusion of this example?

The Smoot-Hawley Tariff

For the U.S.steel industry,a "Buy American" provision in the 2009 stimulus bill would create gains for all of the following except

All of the following are sources of comparative advantage except

Trade that is within a country or between countries is based on the principle of

Under trade agreements signed with other countries,the United States is allowed to impose tariffs on imports if foreign firms are selling products in the United States at below their production cost.This is exactly what occurred when the United States raised the tariff on wire hangers imported from China.At the time the tariff was imposed,it was estimated that the tariff would save about ________ jobs in U.S factories making wire hangers at an annual cost per job saved of about ________.

The 1994 agreement that eliminated most tariffs among the United States,Canada,and Mexico is known as

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the value of consumer surplus after the imposition of the quota?

The terms of trade refers to

When Sophie,a French citizen,purchases a Dell computer in Paris that was produced in Texas,the purchase is

What are three primary reasons for the growth of international trade over the past 50 years?

Examples of comparative advantage often begin with two countries that each produce the same two goods.Each country is then shown to have a comparative advantage in producing the good it can produce at a lower opportunity cost,and specializes in the production of the good for which it has a comparative advantage.How do these examples prove that both nations are made better off as a result of trade than they would be without trade?

The World Trade Organization (WTO)promotes foreign trade and investment,or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.All of the following are reasons for these anti-globalization protests except

If the U.S.government implements a tariff on Chinese tire imports,the price of Chinese-made tires will ________,the quantity demanded will ________,and consumer surplus will ________.

Figure 9-1 Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Suppose the government allows imports of leather footwear into the United States.What happens to the market price and what is the quantity of imports?

Which of the following is common to both tariffs and quotas?

Examples of comparative advantage show how trade between two countries can make each better off.Compared to their pre-trade positions,trade makes both countries better off because in each country

Assume that Honduras has a comparative advantage in producing bananas and exports bananas to Brazil.We can conclude that