Exam 32: Comparative Advantage and the Open Economy

-Refer to the above figures. A quota is placed on a foreign good. Which figure represents the situation in the domestic market for a competing domestic good?

-Refer to the above figures. A tariff is placed on a foreign good. Which figure represents the situation in the domestic market for the foreign good?

One argument against free trade is the

Maximum Feasible Hourly Production Rates for Either Food or Cloth Using All Available Resources -Using the data in the above table and assuming constant opportunity costs, it is correct to state that

Maximum Feasible Hourly Production Rates (in Tons)of Either Wine or Beef Using All Available Resources Product Argentina France Wine (gallons)30 60 Beef (pounds)10 30 -Use the above table. Assuming constant opportunity costs, the opportunity cost of producing a pound of beef in France is

Voluntary restraint agreements are

A government-imposed restriction on the quantity of a good that can be imported is

An official agreement with another country to restrict the quantity of its exports to the U.S. is

Which of the following would increase the total amount of trade in the world?

The World Trade Organization

An international agreement from 1947 designed to lower tariffs was

Absolute advantage is

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. If opportunity costs are constant, then the United States and Mexico will produce goods in which they have a comparative advantage and trade at a rate of exchange of

An international agreement established in 1947 to further world trade by reducing barriers and tariffs is the

An agreement with another country in which it agrees to import more from the United States is called a

-According to the above table, if these two countries trade,

Consider a world of two countries facing opportunity costs and producing only wheat and cloth. In one hour, residents of Country A can produce a maximum of either 1 unit of wheat or 0.5 unit of cloth, whereas residents of Country B can produce a maximum of either 0.3 unit of wheat or 0.4 unit of cloth. Country B should export

When a good is put onto the global market at a price below the cost to produce it, this is known as

U.S. automakers have an interest to make it more difficult for European competitors to locate assembly plants in Canada or Mexico and thereby ship finished automobiles to the United States duty-free. This is an example of

Some nations avoid the effects of trade deflection in a trade bloc by enforcing