Exam 9: Comparative Advantage and the Gains From International Trade

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1. Under autarky, the deadweight loss is

If a country has a comparative advantage in producing a product, it must also have an absolute advantage in producing that product.

If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then

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. With the tariff in place, the United States

Imports are goods and services bought domestically

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. With a quota in place, what is the quantity consumed in the domestic market and what portion of this is supplied by imports?

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.

In reaction to the passage of the Smoot-Hawley Tariff, Canada as well as many other U.S. trading partners

One of the main sources of comparative advantage is internal economies.

The United States has developed a comparative advantage in film production due to the film industry being long-established in southern California, and lower costs result from the size of the industry in the area. This source of comparative advantage is referred to as

Free trade refers to trade between countries

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 tariff causes domestic consumption of rice

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. The market price falls to $18. What is the value of consumer surplus?

Figure 9-5 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-5 shows the impact of this tariff. -Refer to Figure 9-5. Without the tariff in place, the United States consumes

Assume that Finland and Latvia produce only two goods. If Finland has an absolute advantage in the production of these two goods compared to Latvia, Finland can still benefit from trade with Latvia.

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?

A quota

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

A Federal Reserve publication proclaimed that "Trade is a win-win situation for all countries that participate." This statement is

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. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many swords will Estonia consume?