Exam 9: Comparative Advantage and the Gains From International Trade

Explain whether it is possible for a country to have an absolute advantage in the production of a product without having a comparative advantage in the production of that product.

Table 9-7 Output Per Hour of Work Table 9-7 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand. -Refer to Table 9-7. a. Which country has an absolute advantage in the production of handbags and jackets? b. Which country has a comparative advantage in the production of handbags? c. Which country has a comparative advantage in the production of jackets?

A quota is a numerical limit on the quantity of a good that can be imported.

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. 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?

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. With trade, what is the total gain in hat production?

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. The increase in domestic producer surplus as a result of the tariff is equal to

Costa Rica is a leading exporter of bananas. What explains the comparative advantage of this country in banana production?

Absolute advantage is

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. If the tariff was replaced by a quota which limited coffee imports to 12 million pounds, the amount of revenue received by coffee importers would equal

Table 9-8 Table 9-8 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 9-8. Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh.

Suppose that American firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries with a "Buy Canadian" provision. This policy, similar to the original "Buy American" provision in the 2009 U.S. stimulus bill, is likely to cause

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

When a tariff is placed on running shoes, the ________ to local businesses and local consumers are likely to be greater in dollar terms than the ________ to the owner of a shoe factory and its workers.

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products. Why, then, do some people support protectionism?

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. With trade, what is the total gain in clock production?

Which of the following describes the infant industry argument for protectionism?

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.

Imposing trade barriers does all of the following except

When Sophie, a French citizen, purchases a Dell computer in Paris, France that was produced in Texas, the purchase is

A tariff is