Exam 22: International Trade and Comparative Advantage

Figure 22-7 -In Figure 22-7, CF has the same slope as BG.AB and CD are the production possibilities of Pestoland and Pastaland, respectively.If both countries are given the opportunity to trade at prices indicated by CF,

Trade occurs only when a country has an absolute advantage and not just a comparative advantage over another country.

In the long run, foreign labor remains cheap when and if

How can tariffs lead to a situation in which all parties to a trade lose?

Table 22-4 -Table 22-4 presents the demand and supply schedules for television sets in Japan and the United States.If the United States and Japan decide to trade with each other, what will happen to the output of television sets in Japan?

Figure 22-9 -In Figure 22-9, Pestoland exports pasta to Pastaland.Equilibrium will occur when

Figure 22-9 -In Figure 22-9, at price OC total quantity demanded exceeds quantity supplied and price will rise to

Workers in high-wage countries cannot improve their real income when they trade with low-wage countries.

Figure 22-9 -In Figure 22-9, at price OC

Some nations that seek to produce all of their own needs face the problem that

Figure 22-8 -The effect of opening trade between countries is

Comparative advantage is illustrated by the slopes of production possibilities frontiers.

Table 22-4 -Table 22-4 presents the demand and supply schedules for television sets in Japan and the United States.If there is no trade between these countries, what are the equilibrium price and quantity in the United States?

Figure 22-13 See Figure 22-13.The quota raises the price from P₁ to P₂, and lowers the quantity imported from Q₁ to Q₂.The primary determinant of what portion of the quota is paid by the buyers is elasticity of demand.The more elastic demand, the lower the portion paid by buyers.The less elastic demand, the higher the portion paid by buyers. -What is strategic trade policy? What are the pros and cons of such a policy by a nation in its dealings with other nations?

Figure 22-9 -In Figure 22-9, Pestoland exports pasta to Pastaland.The equilibrium price of pasta will be

The U.S.Constitution

The economic effects of a quota are identical to those of a tariff.

If Argentina has a large amount of farmland and Great Britain has many factories,

Specialization is a major obstacle to international trade.

A restriction of imports that is accomplished by a quota normally