Exam 9: Comparative Advantage and the Gains From International Trade

In the United States during the Great Depression, tariffs were ________ than they were following World War II, and ________ than they are today.

Article Summary In a September 2017 ruling, the U.S. International Trade Commission (ITC) found that imports of solar panels harmed U.S. manufacturers, opening the door for the Trump administration to impose tariffs on foreign solar panels and modules. The initial complaint to the ITC was filed in early 2017 by bankrupt solar panel manufacturer Suniva, who argued that a rapid increase in imports of inexpensive foreign product put U.S. manufacturers at risk. The decision was opposed by many in the solar panel industry, arguing that tariffs will hurt the industry as a whole. While Suniva commissioned a report that showed devastating job losses without industry protection, an independent analysis by Bloomberg New Energy Finance found a ruling for Suniva would, at most, only create 6,400 jobs and "downstream job losses would almost certainly exceed any manufacturing gains." -Refer to the Article Summary. All else equal, if the Trump administration decides to enact protectionist measures, such as a tariff, against foreign solar panels, the price of solar panels in the United States will ________ and the quantity of solar panels demanded in the United States will ________.

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 domestic consumers purchase?

A tariff is a tax imposed by a government on

NAFTA refers to a 1994 agreement that eliminated most tariffs among which countries?

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 clocks will Belize consume?

Table 9-4 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 9-4. Use the table above to select the statement that accurately interprets the data in the table.

Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade. These examples are misleading because

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 demanded?

What are the four main sources of comparative advantage? Briefly explain each source and provide examples.

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. What is the opportunity cost to produce 1 clock in Belize?

Beginning in ________, the government of China adopted market-based reforms of the economy and began exporting significant quantities of goods to the United States and other countries.

If a country has a comparative advantage in producing a product, it may or may not have an absolute advantage in producing that product.

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 Denmark gain compared to the "without trade" numbers?

What is autarky?

What was the GATT, why was it established, and why and with what was it replaced?

a. Distinguish between a tariff and a quota. b. In what ways are tariffs and quotas similar? c. In what ways are tariffs and quotas different? d. Why might a foreign producer prefer a quota rather than a tariff?

Globalization is the process of countries imposing trade restrictions on other countries.

The 1994 agreement that eliminated most tariffs among the United States, Canada, and Mexico is known as

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 swords?