Exam 5: International Trade 5

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 deadweight loss when a tariff raises the domestic price from the world price to P_T.

Compared with autarky, international trade leads to _____ domestic production in exporting industries and _____ domestic production in import-competing industries.

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 Russia opens to trade and finds the world price to be $10. Russia will:

When a country exchanges goods with another country, in the short run:

When a country moves from autarky to free international trade, consumers and producers in the import and export sectors all gain (i.e., both consumer surplus and producer surplus increase in both sectors).

The World Trade Organization:

The organization that oversees global trade negotiations and settles trade disputes among its members is the:

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. Tahoe has an absolute advantage in producing:

In a Ricardian model of international trade, the production possibility frontiers are _____, indicating that the opportunity cost of increasing the production of one item relative to another _____.

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, this country:

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, what is the gain in consumer surplus?

An urbanized country has 100 million workers living on 100 square miles of land. A country that is principally rural has 1 million workers living on 10 square miles of land. From this information we know that the urbanized country is _____ relative to the rural country.

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 beef:

Gains from trade will result if a country specializes in:

The absolute value of the slope of the production possibility frontier at any point:

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. Consumer surplus in free trade equals the area:

The belief that importing goods from low-wage countries will hurt the standard of living of workers in the importing country is known as the:

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 producer surplus _____ to _____.

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. Calculate the loss of consumer surplus.

A blockade at the border between the United States and Canada prevents the entry of all lumber products to the United States from Canada. This blockade will: