Exam 17: Comparative Advantage and the Gains From International Trade

Figure 16-3 Quantities of goods that can be produced in one day with available resources: -In Figure 16-3,the opportunity cost in Costa Rica of producing one additional bicycle is

If Canada can produce 500 TV sets at the cost of 10 cars,while Mexico can produce 1,000 TV sets at the cost of 8 cars,we know the following:

If countries begin to specialize according to comparative advantage,a more efficient use of resources occurs.As a result,the world output of at least one good increases,with no decrease in the output of any other good.

If Country A can produce a good at a lower opportunity cost than Country B can,

U.S.imports of sugar

Trade restrictions have been defended on the grounds that they

When nations trade according to their comparative advantages,

Consider the following table on labor hours needed per unit of output: Ignoring nonlabor inputs,which of the following statements is correct?

A high-wage country cannot afford free trade with a low-wage country.The high- wage country will either be undersold or its workers will be forced to accept lower living standards.

Consider the following table on output producible per 100 labor hours: Which of the following statements is correct?

Which of the following correctly describes free international trade in accordance with comparative advantage?

Figure 16-6 -According to Figure 16-6,all of the following statements are correct except

One advantage of a tariff over a quota,from the perspective of the nation imposing it,is that a tariff

Since World War II,there has been a worldwide movement away from free trade policies.

In an Israeli factory,each worker can produce 2/5 of a shirt in an hour or 1/10 of a pair of pants in an hour.If there are 500 workers in the factory,what is opportunity cost of producing one pair of pants?

The United States does not impose tariffs or quotas;however,many of its trading partners do have these trade restrictions.

A nation's comparative advantage

Figure 16-2 Number of workers needed to produce one unit of each of the following goods: -In Figure 16-2,if Korea produces two fewer radios,then how many more calculators could it produce?

Figure 16-1 Number of workers needed to produce one unit of each of the following goods: -What can be said regarding absolute advantage in production for the two countries shown in Figure 16-1?

International trade occurs whenever