Exam 7: Comparative Advantage and the Gains From International Trade

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.The loss in domestic consumer surplus as a result of the tariff is equal to

China has developed a comparative advantage in the production of children's toys.The source of this comparative advantage is

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 gain compared to the "without trade" numbers?

If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.

When Tesla,a U.S.company,purchases Italian-made Pirelli tires for its automobiles,the purchase is

Economists believe the most persuasive argument for protectionism is to

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.With the tariff in place,the United States

The United States has developed a comparative advantage in digital computers,airliners,and many prescription drugs.The source of its comparative advantage in these products is

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

Which of the following is the best example of a voluntary export restraint?

Table 7-4 Output Per Hour of Work Table 7-4 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada. -Refer to Table 7-4. a.Which country has an absolute advantage in the production of both light bulbs and flash drives? b.Which country has a comparative advantage in the production of light bulbs? c.Which country has a comparative advantage in the production of flash drives?

Is the value of U.S.exports typically larger or smaller than the value of U.S.imports?

What are three primary reasons for the growth of international trade over the past 50 years?

The United States would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

One reason a country does not specialize completely in production is that production of most goods involves increasing opportunity costs.

The General Agreement on Tariffs and Trade (GATT)was formed to replace the World Trade Organization (WTO)because the WTO was empowered only to reduce barriers to trade in goods.The GATT is an agreement to reduce barriers to trade in goods,services,and intellectual property.

A tax imposed by a government on imports of a good into a country is called a

Trade restrictions tend to preserve ________ in the protected industries and lead to ________ in other industries.

Which of the following is a reason for the success that firms have in getting the government to erect barriers to foreign competition?

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods,effectively acting as a quota of zero imports when stimulus money was being spent.The "Buy American" provision would ________ consumer surplus and ________ producer surplus for industries that produced protected products in the United States.