Exam 5: International Trade 5

France and England both produce wine and cloth with constant opportunity costs. France can produce 150 barrels of wine if it produces no cloth or 100 bolts of cloth if it produces no wine. England can produce 50 barrels of wine if it produces no cloth or 150 bolts of cloth if it produces no wine. When international trade takes place, each country specializes completely in the production of the good in which it has a comparative advantage-1 barrel of wine exchanges for 1 bolt of cloth-and France exports 50 units of wine. We can conclude that France produces _____ units of wine and _____ units of cloth and that France consumes _____ units of wine and _____ units of cloth.

If the executives of the U.S. silicon chip industry lobby Congress for protection from imports on the grounds that the military should have an unrestricted domestic supply of silicon chips, they are using the _____ argument.

A regulation that specifies the maximum amount of a good or service that may be imported during a specified period is a(n):

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. _____ has (have) an absolute advantage in producing crude oil.

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. The United States would _____ SUVs.

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. Given the opportunity costs of production:

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 Mexico the opportunity cost of producing 150,000 barrels of crude oil is _____ tractors.

Mexico has an abundance of unskilled labor and the United States has an abundance of skilled labor. The Heckscher-Ohlin model implies that trade between the United States and Mexico will lead to a decrease in the wages of unskilled labor in the United States and an increase in the wages of skilled labor in the United States.

If quota rents do not accrue to the government, then the net loss to the government from an import quota is _____ the deadweight loss from an equivalent tariff.

The United States must give up the production of 500 bicycles to produce 20 additional tractors. The opportunity cost of producing 100 bicycles is _____ tractor(s).

The effect of international trade on U.S. factor markets is to:

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. The opportunity cost of _____ is _____ in the United States as (than) in Mexico.

If a market begins to engage in international trade, we can assume that:

Which of the following oversees international trade agreements?

The belief that trade must be bad for exporting countries because the foreign workers are paid very low wages by our standards is the:

The Heckscher-Ohlin model cannot explain United States-Mexico trade, since the United States has more labor and more land than Mexico.

Which model states that nations that are abundant in a factor will have a comparative advantage in a good whose production is intensive in that factor?

Countries that engage in trade will tend to specialize in goods in which they have _____ and will _____ those goods.

When a business hires people in other countries to perform various tasks, _____ has occurred.

If Canada imposes a tariff of $5 per bottle on French wine, the most likely effect will be to raise the price of wine in Canada by: