Exam 7: Comparative Advantage and the Gains From International Trade

If Finland has an absolute advantage in the production of two goods compared to Latvia,Finland can still benefit from trade with Latvia.

Table 7-6 Output per hour Production and Production of work Consumption without Trade with Trade 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 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 7-6.Which country has a comparative advantage in producing belts?

Autarky is a situation where one country does not trade with other countries.

Which of the following statements is false?

Figure 7-2 Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff. -Refer to Figure 7-2.If the tariff was replaced by a quota which limited coffee imports to 20 million pounds,the amount of revenue received by coffee importers would equal

If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden,which of the following would explain this pattern of trade?

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.The market price falls to $24.What area represents domestic producer surplus?

Table 7-1 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 7-1.Use the table above to select the statement that accurately interprets the data in the table.

Table 7-5 Table 7-5 shows the output per week for pens and pencils by Tran and Farah. -Refer to Table 7-5. a.Which person has an absolute advantage in the production of pens? Pencils? b.Which person has a comparative advantage in the production of pens? c.Which person has a comparative advantage in the production of pencils?

Table 7-6 Output per hour Production and Production of work Consumption without Trade with Trade 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 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many belts will Morocco consume?

Figure 7-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 7-3 illustrates the impact of the quota. -Refer to Figure 7-3.What is the value of domestic producer surplus without a quota?

Which of the following statements about the importance of trade to the U.S.economy is false?

The ratio at which a country can trade its exports for imports from other countries is called comparative advantage.

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff.In response to this tariff,other countries ________ and international trade ________.

Table 7-1 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 7-1.Use the table above to select the statement that accurately interprets the data in the table.

Which of the following is the best example of a tariff?

Table 7-6 Output per hour Production and Production of work Consumption without Trade with Trade 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 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many belts will Estonia consume?

Figure 7-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 7-3 illustrates the impact of the quota. -Refer to Figure 7-3.What is the value of domestic producer surplus after the imposition of a quota?

Table 7-2 Madison and Austin own Cafe Ole'.Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 7-2.Select the statement that accurately interprets the data in the table.

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Under autarky,the equilibrium price is