Exam 9: Comparative Advantage and the Gains From International Trade

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. Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand.

One reason a country does not specialize completely in production is that not all goods and services are traded internationally.

Table 9-1 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 9-1. Select the statement that accurately interprets the data in the table.

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 producers supply?

A tariff is a tax imposed by a government on 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.

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. What is the area that represents revenue to foreign producers who are granted permission to sell in the U.S. market when there is a quota?

A voluntary export restraint is an agreement negotiated by two countries that places ________ that can be imported by one country from another country.

Figure 9-4 Figure 9-4 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-4. Under autarky, the consumer surplus is area

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 tariff causes domestic consumption of coffee

Which of the following is common to both tariffs and quotas?

Protectionism is the use of ________ to protect domestic firms from foreign competition.

Whenever a buyer and a seller agree to trade, both must believe they will be made better off

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 an absolute advantage in producing belts?

Figure 9-7 Bragabong currently both produces and imports almonds. The government of Bragabong decides to restrict international trade in almonds by imposing a quota that allows imports of only 10 million kilos each year. Figure 9-7 shows the estimated demand and supply curves for almonds in Bragabong and the results of imposing the quota. -Use Figure 9-7 to answer questions a-j. a. If there is no quota what is the domestic price of almonds and what is the quantity of almonds demanded by consumers? b. If there is no quota how many kilos of almonds would domestic producers supply and what quantity would be imported? c. If there is no quota what is the dollar value of consumer surplus? d. If there is no quota what is the dollar value of producer surplus received by producers in Bragabong? e. If there is no quota what is the revenue received by foreign producers who supply almonds to Bragabong? f. With a quota in place what is the price that consumers of Bragabong must now pay and what is the quantity demanded? g. With a quota in place what is the dollar value of consumer surplus? Are consumers better off? h. With a quota in place what is the dollar value of producer surplus received by producers in Bragabong? Are domestic producers better off? i. Calculate the revenue to foreign producers who are granted permission to sell in Bragabong after the imposition of the quota. j. Calculate the deadweight loss as a result of the quota.

Which of the following describes the national security argument for protectionism?

Since 1999, ________ U.S. manufacturing jobs may have been lost to Chinese imports, and trade with China has ________ throughout the United States

It is difficult to determine if foreign companies are selling their products for prices below their costs of production because

The first example used to explain comparative advantage used two countries (England and Portugal) and two goods (wine and cloth) to show that

Which of the following is the best example of a tariff?