Exam 55: World Trade Equilibrium

The following table shows that in one day poultry farmers in Arkansas can produce 3 cartons of eggs, while poultry farmers in Idaho can produce 2 cartons of eggs.It takes Arkansas potato farmers one day to produce 30 tons of potatoes, while Idaho potato farmers produce 10 tons of potatoes in that same time. Table 34.4 According to Table 34.4, what is the opportunity cost of 1 crate of eggs in Idaho?

The following table shows the units of calculators and rice produced by a laborer in a day in Japan and Korea. Table 34.3 According to Table 34.3, what is the greatest amount Korea is willing to pay for 1 calculator?

The Dutch Disease had occurred in Netherlands because:

Scenario 34.2 Suppose labor productivity differences are the only determinants of comparative advantage, and both Egypt and produce only corn and cocoa.In Egypt, 10 bushels of corn or 15 pounds of cocoa can be produced in a day.In Ghana, one day of labor can be used to produce either 2 bushels of corn or 8 pounds of cocoa. Refer to Scenario 34.2.Ghana will be willing to trade cocoa for Egyptian corn if in the international market, 1 pound of cocoa can be exchanged for:

The difference between absolute and comparative advantage is that:

Which of the following looks at the demand side of the market to explain some of the observed international trade patterns?

What is known as the Dutch disease?

Firms in industrial countries find a larger market for their goods in other industrial countries than in developing countries because:

The limits of the terms of trade are determined by the:

The export supply curve is the portion of the domestic supply curve below the no-trade equilibrium price.

Countries tend to export different goods and services because of:

"Most textiles worn by American consumers are produced in Asian and South American countries where the opportunity costs of production are lower." This observation refers to the:

We know that industrial countries tend to trade with other industrial countries.This pattern counters the:

If the world price of a good is equal to its no-trade equilibrium price, the country will import more of the good from other nations.

The data in the table below assumes that with the same quantity of resources, both Australia and Philippines produces food and computers.Australia can make 1, 000 computers or 2, 000 units of food in a day, and the Philippines can make 200 computers or 1, 200 units of food in a day. Table 34.2 According to Table 34.2, what is the opportunity cost of 1 unit of food in Australia?

The higher the world price above the domestic no-trade equilibrium, the lesser the quantity of a good exported by a country.

A country with a strong bargaining power is likely to direct the terms of trade in its favor.

The table below shows the quantity demanded (in thousands)and quantity supplied (in thousands)of computers in the U.S.and Canada at different prices. Table 34.5 According to Table 34.5, the international equilibrium price of computers is:

If the world price is below the domestic "no-trade" equilibrium price, then with international trade:

Though the countries can benefit by completely specializing in the production of the good in which they have comparative advantage, in real world however, they do not completely specialize.