Exam 2: Foundations of Modern Trade Theory: Comparative Advantage

Figure 2.2 illustrates trade data for Canada.The figure assumes that Canada attains international trade equilibrium at point C. Figure 2.2.Canadian Trade Possibilities -Concerning possible determinants of international trade,which are sources of comparative advantage? Differences in:

Table 2.2.Output possibilities for South Korea and Japan -Refer to Table 2.2.With international trade,what would be the maximum number of VCRs that Japan would be willing to export to South Korea in exchange for each ton of steel?

The price-specie-flow mechanism illustrated why nations could not maintain trade surpluses or trade deficits over the long run.

When a nation requires fewer resources than another nation to produce a product,the nation is said to have a:

David Ricardo's simplified trade model assumes all of the following except

The earliest statement of the principle of comparative advantage is associated with:

International trade is based on the notion that:

According to the price-specie-flow-doctrine,a trade-surplus nation would experience gold outflows,a decrease in its money supply,and a fall in its price level.

Is it possible to estimate the gains from trade?

Mercantilism refers to a system of restraints on imports and the promotion of exports,as used by governments in the 1600s and 1700s.

In his empirical test of the principle of comparative advantage,G.MacDougall found that relatively high export ratios are associated with relatively high labor productivity.

Trade between two nations would not be possible if they have:

Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in the United Kingdom equal $10 per hour.Production costs would be lower in the United States than the United Kingdom if:

Table 2.2.Output possibilities for South Korea and Japan -Refer to Table 2.2.According to the principle of comparative advantage:

Which of the following is not an argument to support international trade