Exam 32: Comparative Advantage and the Open Economy

Assume that U.S. producers can manufacture cookies at a lower opportunity cost than Mexican producers. If this is the case,

Consider the following information, and assume that opportunity costs are constant: On one hand, residents of Country A can produce more corn in a year than residents of Country B, but they can produce computers at a lower opportunity cost than residents of country B. On the other hand, residents of country B can produce more computers in a year than residents of Country A, but they can produce corn at a lower opportunity cost than residents of country A. It can be concluded that residents of

A tariff is

A country will specialize in the good for which

A legal restriction on the amount of a good that can be imported into a country is known as a

Suppose Mexico has a comparative advantage relative to the United States in the manufacture of clothing and the United States has a comparative advantage in producing agricultural products. Which of the following is most likely to occur?

Dumping is considered a practice that seriously harms domestic producers because

All of the following are cited as factors in explaining U.S. competitiveness EXCEPT

Today, in the United States, exports are about

Since 1950, the volume of world trade and the volume of world real GDP

One problem with the infant industry argument is that

Maximum Feasible Hourly Production Rates of Either Product A or Product B Using All Available Resources Product Country X Country Y A 4 8 B 4 4 -Refer to the above table. Assuming constant opportunity costs,

When U.S. residents buy products that were made in Japan, then ultimately the Japanese want

Tariffs to limit imports to "protect U.S. jobs" will also

The ability to produce a good at lower opportunity costs than another producer is known as

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product United States Mexico Computers 8 10 Bicycles 4 2 -Refer to the above table. It may be concluded that

Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product United States Mexico Computers 8 3 Bicycles 2 6 -Refer to the above table. If opportunity costs are constant, the two countries will gain from trade at a rate of exchange of

Which of the following is NOT an argument against free trade?

Dumping is

"International trade bestows benefits on countries through the international transmission of ideas." Do you agree or disagree? Explain.