Exam 9: Comparative Advantage and the Gains From International Trade

Output per hour Production and Production of work Consumption without Trade with Trade Clocks Hats Clocks Hats Clocks Hats Denmark 6 3 900 150 1,200 0 Belize 1 2 150 100 0 400 Denmark and Belize can produce both clocks and hats.Each country has a total of 200 available labor hours for the production of clocks and hats.Table 9-11 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 9-11.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Belize consume?

Berries Fish Rob 20 80 Bill 30 60 Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced. -Refer to Table 9-4.Use the table above to select the statement that accurately interprets the data in the table.

If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada,which of the following would explain this pattern of trade?

Goods and services bought domestically but produced in other countries are referred to as

Suppose that American firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries with a "Buy Canadian" provision.This policy,similar to the original "Buy American" provision in the 2009 U.S.stimulus bill,is likely to cause

A numerical limit imposed by a government on the quantity of a good that can be imported into the country is called a

The World Trade Organization (WTO)promotes foreign trade and investment,or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.All of the following are reasons for these anti-globalization protests except

In the 1930s,the United States charged an average tariff rate ________.Today,the rate is ________.

Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy,a dog grooming business.Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 9-1.Select the statement that accurately interprets the data in the table.

________ is the ability of an individual,a firm,or a country to produce a good or service at a lower opportunity cost than competitors.

Foreign factories produce ________ of the shoes New Balance sells in the United States.

Trade restrictions are often motivated by a desire to save domestic jobs threatened by competition from imports.Which of the following counter-arguments is made by economists who oppose trade restrictions?

Output per hour Production and Production of work Consumption without Trade with Trade Swords Belts Swords Belts Swords Belts Estonia 5 3 100 40 200 0 Morocco 2 2 60 60 0 120 Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 9-12 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 9-12.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many swords will Estonia gain compared to the "without trade" numbers?

Figure 9-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky,the producer surplus is

Tastes for products such as beer differ.As a result

a.What is the World Trade Organization? b.When was it established? c.How many countries are members of the World Trade Organization?

Free trade refers to trade between countries without government restrictions.

In reaction to the passage of the Smoot-Hawley Tariff,Canada as well as many other U.S.trading partners

In the real world,we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.One reasons for this is

Distinguish between a voluntary export restraint and a quota.