Exam 9: Comparative Advantage and the Gains From International Trade

Table 9-11 Output per hour Production and Production of work Consumption without Trade with Trade 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 hats will Belize gain compared to the "without trade" numbers?

Many economists support trade agreements, maintaining that the agreements improve economic efficiency because they result in goods being produced

The Smoot-Hawley Tariff

In the 1930s the United States charged an average tariff rate

Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions, trade makes both countries better off because in each country

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3. If there was no quota, how many pounds of peanuts would be imported?

Which of the following is not an example of a trade restriction?

Dumping refers to countries exporting unwanted and inferior products to other countries.

Table 9-12 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 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. Which country has a comparative advantage in producing belts?

Trade that is within a country or between countries is based on the principle of

Table 9-9 Output Per Hour of Work Table 9-9 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada. -Refer to Table 9-9. Fill in the following table with the opportunity costs of producing light bulbs and flash drives for Mexico and Canada.

Figure 9-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2. The loss in domestic consumer surplus as a result of the tariff is equal to the area

a. Define the term "globalization." b. Describe the benefits of globalization. c. Who is likely to oppose globalization and why?

Table 9-5 Madison and Austin own Cafe Ole'. Table 9-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour. -Refer to Table 9-5. Select the statement that accurately interprets the data in the table.

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1. Suppose the government allows imports of leather footwear into the United States. What will be the quantity of imports?

Table 9-6 Mateo and Celeste produce custom saddles and spurs. Table 9-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 9-6. Select the statement that accurately interprets the data in the table.

When Roxanne, a U.S. citizen, purchases a designer dress from Barneys of New York that was made in Milan, the purchase is

As percentage of imports, the largest product category of U.S. imports from China is

Countries that engage in trade will tend to specialize in the production of goods and services in which they have ________ and will ________ these goods and services.

Under autarky, domestic producer surplus is represented by the area