Exam 5: International Trade 5

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. Both nations can produce cars and lumber. If these nations trade, Canada has the comparative advantage in _____ and should trade _____ to the United States in exchange for _____.

Assume an economy moves from autarky to free international trade. In the export sector, consumer surplus _____, producer surplus _____, and the economy as a whole _____.

Use the following to answer questions : Figure: The Market for Laptop Sleeves -(Figure: The Market for Laptop Sleeves) Look at the figure The Market for Laptop Sleeves. Assume that S and D are the domestic supply and demand curves and the world price is P_W. Identify the area of consumer surplus when a tariff raises the domestic price from the world price to P_T.

Use the following to answer questions: -(Table: Production Possibilities for Machinery and Petroleum) Look at the table Production Possibilities for Machinery and Petroleum. The opportunity cost in the United States of producing 30 units of petroleum is _____ units of machinery.

Production possibility frontiers:

In a single year, Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Venezuela can raise 50 tons of beef or produce 750 boxes of tulips. When the two countries begin trading beef for tulips, we expect the price of beef in Venezuela:

Countries that trade based on the Heckscher-Ohlin model will find that:

China, which is labor-abundant, has a comparative advantage in clothing production, which is labor-intensive. Which of the following models explains this pattern of comparative advantage?

Britain must give up the production of 75 hats to produce 25 additional sweaters. The opportunity cost of producing 3 hats is _____ sweater(s).

Use the following to answer questions : Figure: The Market for Tea in Sri Lanka -(Figure: The Market for Tea in Sri Lanka) Look at the figure The Market for Tea in Sri Lanka. In autarky, the price is P₁. When the economy is opened to trade, the price rises to P_W and consumer surplus _____ to _____.

Use the following to answer questions : -(Table: Production Possibilities) Look at the table Production Possibilities. The opportunity cost of 1 computer for _____ is _____.

If Japan levies tariffs on U.S. goods entering Japan, this will tend to:

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, then the price of wheat in terms of toys will be:

Although U.S. exports and imports have grown substantially in absolute terms since the 1960s, the share of exports and imports in total output has fallen significantly over the past few decades.

If labor is abundant in South Africa but capital is scarce, when South Africa opens to trade, the price of labor will _____ and the price of capital will _____.

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. Suppose producers lobby effectively for the imposition of a tariff that raises the world price from $10 to $15. Tariff revenue to the government will equal:

Saudi Arabia has a tremendous comparative advantage in petroleum. Which of the following is a source of this comparative advantage?

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. South Africa will _____ oranges and the volume of trade will equal _____.

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

In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips. In autarky, the opportunity cost of 1 ton of beef in the Netherlands is: