Exam 9: Comparative Advantage and the Gains From International Trade

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. If the tariff was replaced by a quota which limited rice imports to 16 million pounds, the amount of additional revenue received by rice importers would equal

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

Economists studying the effect of the China shock on the U.S. economy point out that the firms most hurt by Chinese imports have been

Table 9-2 Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2. Select the statement that accurately interprets the data in the table.

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

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. What is the opportunity cost to produce 1 sword in Estonia?

Protectionism

Figure 9-4 Figure 9-4 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-4. Suppose the government allows imports of leather footwear into the United States. The market price falls to $24. What area represents consumer surplus?

An economic principle that explains why countries produce different goods and services is

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 domestic producer surplus?

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?

The increase in unemployment in the United States that resulted from the China shock

Jobs lost to foreign trade are generally easy to identify, but jobs created by foreign trade are generally less easy to identify.

Which of the following is not a source of comparative advantage?

The U.S. economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

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. All of the following are terms of trade that could possibly benefit both countries except

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. Which country has a comparative advantage in producing clocks?