Exam 5: International Trade 5

Use the following to answer questions : Figure: The Domestic Supply and Demand for SUVs in the United States -(Figure: The Domestic Supply and Demand for SUVs in the United States) Look at the figure The Domestic Supply and Demand for SUVs in the United States. Suppose the world price equals $50,000 and there is free trade. In the United States, consumer surplus would _____ and producer surplus would _____.

Use the following to answer questions : Figure: The Market for Melons in Russia II -(Figure: The Markets for Melons in Russia II) Look at the figure The Market for Melons in Russia II. As a result of a tariff that raises the world price from $10 to $15, the country has a deadweight loss equal to:

The _____ analyzes trade under the assumption that opportunity costs are constant and therefore production possibility frontiers are straight lines.

A tariff or quota will _____ prices and _____ the consumption of the protected goods in the importing country.

In autarky a country:

Use the following to answer questions : -(Table: Production Possibilities for the United States and Canada) Look at the table Production Possibilities for the United States and Canada. _____ has (have) an absolute advantage in producing cars.

Use the following to answer questions : -(Table: Production Possibilities in the United States and Colombia) Look at the table Production Possibilities in the United States and Colombia. Which country should export coffee and which country should export computers? Justify your answer.

According to the Heckscher-Ohlin model, Brazil will have a comparative advantage in oranges if the factors _____ in the production of oranges are _____.

Use the following to answer questions : Figure: The Domestic Market for Rice -(Figure: The Domestic Market for Rice) Look at the figure The Domestic Market for Rice. Assume that P_A is the autarky price and P_W is the world price. After international trade, this nation will _____ a quantity of rice equal to _____.

Mexico is relatively labor-abundant when compared with the United States. Therefore, Mexico has a comparative advantage in _____ compared with the United States.

Use the following to answer questions : Scenario: The Production of Wheat and Toys The table describes the production of two goods, wheat and toys, in country A and country B. Each country has a linear production possibility frontier with respect to its production of the two goods. The numbers in each column represent the total number of units each country could produce if it used all of its resources to produce the good. -(Scenario: The Production of Wheat and Toys) Look at the scenario Production of Wheat and Toys. If each country specializes in the good for which it has the comparative advantage:

In which of the following areas does the United States significantly limit imports?

Mexico produces lettuce but can also import it. If Mexico imports some lettuce:

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. With complete specialization according to comparative advantage, the two nations' combined production of wheat will:

Use the following to answer questions: Figure: The Domestic Market for Digital Cameras -(Figure: Domestic Market for Digital Cameras) Look at the figure The Domestic Market for Digital Cameras. Assume that P_A is the autarky price and P_W is the world price. Total surplus before international trade is equal to the area:

Use the following to answer questions : Figure: The Market for Oranges in South Africa -(Figure: The Market for Oranges in South Africa) Look at the figure The Market for Oranges in South Africa. In autarky, the price of oranges in South Africa is P₁. When the economy is opened to trade, the price falls to P_W and the change in total surplus is area:

Use the following to answer questions : Table: The Production Possibilities for Cars and Leather Boots -(Table: The Production Possibilities for Cars and Leather Boots) Look at the table The Production Possibilities for Cars and Leather Boots. The opportunity cost of producing one car in Mexico is:

While the United States generally follows a policy of free trade, this is true particularly for agriculture and textiles, in which all restrictions on international trade have been removed.

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. Jackson has an absolute advantage in producing:

Use the following to answer questions : Figure: A Tariff on Oranges in South Africa -(Figure: A Tariff on Oranges in South Africa) Look at the figure A Tariff on Oranges in South Africa. When the government imposes a tariff on imported oranges, the price of oranges in South Africa rises from P_W to P_T and domestic consumer surplus _____ to _____.