Exam 5: International Trade 5

Use the following to answer question : Figure: The Gains from International Trade -(Figure: The Gains from International Trade) Look at the figure The Gains from International Trade. If each country specializes completely in the good for which it has a comparative advantage, each country must trade _____ computer(s) for _____ box of roses to consume at combination C'.

Use the following to answer questions : Figure: Comparative Advantage and the Production Possibility Frontier -(Figure: Comparative Advantage and the Production Possibility Frontier) Look at the figure Comparative Advantage and the Production Possibility Frontier. _____ has an absolute advantage in the production of _____ and a comparative advantage in the production of _____.

Since the production of clothing is labor-intensive relative to the production of wheat and China is labor-abundant relative to most countries, we expect China to export clothing.

Use the following to answer questions : Figure: The Market for Thumb Drives -(Figure: The Market for Thumb Drives) Look at the figure The Market for Thumb Drives. Assume that P_A is the autarky price, P_W is the world price, and D and S represent domestic demand and supply, respectively. Producer surplus in free trade equals the area:

If the United States placed larger tariffs on all textiles, domestic _____ surplus would _____.

In the importing country, the most likely effect of a tariff is to:

Advocates of trade barriers suggest that the barriers are needed for national security, job creation, and to:

Japan must give up the production of 75 computers to produce 25 additional cellular telephones. The opportunity cost of producing 3 computers is _____ cell phone(s).

Use the following to answer questions : Figure: The Production Possibility Frontiers for Jackson and Tahoe -(Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe. In autarky, Jackson produces and consumes 30 head of cattle and 80 bushels of wheat, while Tahoe produces and consumes 80 head of cattle and 60 bushels of wheat. If both nations specialize completely in the good of their comparative advantage and Jackson exports 120 bushels of wheat to Tahoe in exchange for 60 head of cattle, then the new consumption point for Jackson after trade is _____ bushels of wheat and _____ head of cattle.

A direct restriction on the quantity of an import is called a(n):

Both the United States and Canada produce automobiles and their components; however, each particular model or component is produced in only one of the two countries. Which of the following explains this pattern of production and trade?

A tariff _____ the price received by domestic producers and _____ the price paid by domestic consumers.

Use the following to answer questions : Figure: The Market for Thumb Drives -(Figure: The Market for Thumb Drives) Look at the figure The Market for Thumb Drives. Assume that P_A is the autarky price, P_W is the world price, and D and S represent domestic demand and supply, respectively. The loss of producer surplus when the market moves from autarky to free trade equals the area:

Which of the following trade patterns is best explained by increasing returns?

Use the following to answer questions : Figure: The Market for MP3 Players -(Figure: The Market for MP3 Players) Look at the figure The Market for MP3 Players. Assume that S_d represents the domestic supply curve and D_d represents the domestic demand curve. If the world price equals $100 and there is free trade, consumer surplus _____ and producer surplus _____ compared to autarky.

Use the following to answer questions : Figure: The Market for Computers -(Figure: The Market for Computers) Look at the figure The Market for Computers. Assume that P_A is the autarky price and P_W is the world price. Consumer surplus with international trade is area:

The United States can produce wine domestically, but it can also import wine if the world price is lower than the domestic price. If the United States imports wine, consumer surplus will _____ by _____ the _____ in producer surplus; total surplus will _____.

France and England both produce wine and clothing with constant opportunity costs. France will have a comparative advantage in wine production if:

Which of the following is an example of a tariff?

The most likely effects of tariffs and/or import quotas are to _____ prices and to _____ consumption of the protected goods in the importing country.