Exam 5: International Trade 5

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 the two countries engage in international trade and specialize completely and if the price of 1 head of cattle equals the price of 2 bushels of wheat, world production of cattle will:

If a country removes a tariff on imported shoes, we expect the domestic price of shoes to _____ and the quantity of shoes consumed in the domestic market to _____ .

If a nation imports a good when the economy is opened to trade, the domestic price of the good will _____ and domestic consumption will _____.

An example of a tariff is a:

Use the following to answer questions : -(Table: The Production Possibilities for Tractors and Crude Oil) Look at the table The Production Possibilities for Tractors and Crude Oil. In the United States the opportunity cost of producing 30,000 barrels of crude oil is _____ tractors.

Use the following to answer questions: Figure: The Production Possibilities for Two Countries -(Figure: The Production Possibilities for Two Countries) Look at the figure The Production Possibilities for Two Countries. Indonesia has a comparative advantage in producing _____, while Malaysia has a comparative advantage in producing _____.

Restrictions on free international trade designed to insulate domestic industries from competitive market forces that originate beyond the borders of the country are _____ policies.

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. The opportunity cost of producing a unit of wheat in country B is:

The World Trade Organization:

Honduras exports clothing to the United States, and the United States exports bulldozers to Honduras. Proponents of the Heckscher-Ohlin model would explain this pattern of trade by stating that:

The United States and the European Union levy heavy import tariffs on agricultural products, which hurt many poor farmers from the very poorest countries in the world.

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

A country that is relatively labor-abundant and relatively land-scarce opens to international trade. As a result, it finds that wages _____ and rents _____.

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. In _____, the opportunity cost of _____ cars is _____ board feet of lumber.

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 completely in the good for which it has the comparative advantage, which combination represents a maximum possible amount of total production of the two goods, given the specialization?

When a country joins the World Trade Organization, it gives up all of its ability to determine its trade policy.

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 were to specialize and trade, the United States would export 1 million cars to Canada in exchange for _____ million board feet of lumber.

Tariffs and import quotas tend to:

Use the following to answer questions: Figure: The Production Possibilities for Two Countries -(Figure: The Production Possibilities for Two Countries) Look at the figure The Production Possibilities for Two Countries. If Indonesia specializes completely in the production of the good of its comparative advantage, it will produce:

On a production possibility frontier, opportunity cost is: