Exam 35: World Trade Equilibrium

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 20.2 According to Table 20.2, Australia has an:

Dutch Disease is associated with a dramatic decline in the demand for a primary commodity produced by a country.

The simultaneous import and export of goods in the same industry by a particular country is known as interindustry trade.

The most heavily traded category of goods in the world is:

The figure given below shows the import demand and export supply curves of corn of the U.S.and Mexico. Figure 20.2 Refer to Figure 20.2.The no-trade equilibrium price of a bushel of corn in Mexico is:

The table below shows units of wheat and cloth produced by each worker per day in both the countries. Table 20.1 According to Table 20.1, the opportunity cost of producing wheat in India equals:

Which of the following statements in the context of U.S.exports is true?

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 20.2 According to Table 20.2, what is the opportunity cost of 1 computer in the Philippines?

According to the Ricardian model, the source of comparative advantage is:

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 20.4 According to Table 20.4, the limits to the terms of trade in eggs are 1 carton of eggs in exchange for:

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

Any terms of trade within the limits set by domestic opportunity costs will be mutually harmful, because each country tries to push the other as close to the limits of the terms of trade as possible.

The original comparative advantage model that used the relative abundance of factors of production to explain comparative advantage assumed that countries:

The proportion of domestic demand for a good that is satisfied by domestic production relative to that supplied by imports is determined by:

Countries should specialize and import goods in which they have a comparative disadvantage.

We benefit from trade if we are able to obtain a good from a foreign country:

It seems self evident that countries would have an advantage in producing those goods that use relatively large amounts of their most abundant factor of production.

The standard interpretation of the Ricardian model is that differences in factor endowments between countries account for differences in labor productivity.

Trade between industrial countries account for the majority of international trade.

The first panel in the following figure shows the domestic demand (D)and supply (S)curves of Columbian coffee and the second panel shows the import demand and export supply of Columbian coffee in the international market. Figure 20.1 Refer to Figure 20.1.The autarky equilibrium price of coffee in Columbia is: