Exam 6: Trade and Why Isnt the Whole World Developed

Which of the following statements correctly highlights a difference between countries with extractive economic institutions and countries with inclusive economic institutions?

The figure below shows production possibilities curves for tomatoes and oranges in two prefectures in a country. -Refer to the figure above. Suppose that Prefecture A produces at point W, while Prefecture B produces at point X. Could there be gains from trade (Prefecture A sells tomatoes to Prefecture B, and Prefecture B sells oranges to Prefecture B)? Why or why not?

Institutional reversal refers to the fact that ________.

Suppose an economy produces only solar panels and coal. Between 2005 and 2015, the production possibilities curve (PPC) for this economy shifted out as characterized in the figure below. Which of the following statements best describes the shift in the PPC between 2005 and 2015?

The following figure shows the demand curve, D, and the supply curve, S, for soap in Barylia. a) What is the consumer surplus, producer surplus, and total surplus in Barylia if the nation does not participate in free trade? b) If the world price of soap is $2 per unit, will Barylia import or export soap? c) What is the change in consumer surplus, producer surplus, and total surplus if Barylia participates in free trade?

The following figure depicts the production possibilities curve when Ann and Bob engage in trade. With all her resources, Ann can either produce two computer programs or one Web site. With all his resources, Bob can either produce one computer program or three Web sites. -Refer to the figure above. What should be the values of C and D?

The following figure depicts the production possibilities curve when Ann and Bob engage in trade. With all her resources, Ann can either produce two computer programs or one Web site. With all his resources, Bob can either produce one computer program or three Web sites. -Refer to the figure above. What is the value of B?

The figure below shows production possibilities curves for tomatoes and oranges in two prefectures in a country. -Refer to the figure above. Suppose that Prefecture A produces at point Y, while Prefecture B produces at point Z. Could there be gains from trade (Prefecture A sells oranges to Prefecture B, and Prefecture B sells tomatoes to Prefecture B)? Why or why not?

The following figure depicts the production possibilities curve when Ann and Bob engage in trade. With all her resources, Ann can either produce two computer programs or one Web site. With all his resources, Bob can either produce one computer program or three Web sites. -Refer to the figure above. What is the value of A?

Yasmin and Zeek are lawyers working at V, W, and X LLP. Yasmin works 48 hours a week, and Zeek also works 48 hours a week. They handle two types of cases, intellectual property (IP) cases and corporate fraud (CF) cases. It takes Yasmin 6 hours to handle each IP case and 4 hours to handle each CF case. Zeek can finish an IP case in 3 hours and a CF case in 6 hours. -Refer to the scenario above. Suppose that the two lawyers' boss wants the total number of IP cases worked on by them to equal the total number of CF cases worked on by them. So long as the total number of IP cases equals the total number of CF cases, their boss does not care which lawyer works on how many of which type of case. So Yasmin and Zeek decide to take advantage of their comparative advantages. How would they divide the tasks?

The U.S. wheat market is represented by the demand and supply curves shown in the figure below. Initially, suppose there is no trade in wheat between the United States and the rest of the world. In this case, consumer surplus is represented by the area ________ and producer surplus is represented by the area ________ in the figure below.

Yasmin and Zeek are lawyers working at V, W, and X LLP. Yasmin works 48 hours a week, and Zeek also works 48 hours a week. They handle two types of cases, intellectual property (IP) cases and corporate fraud (CF) cases. It takes Yasmin 6 hours to handle each IP case and 4 hours to handle each CF case. Zeek can finish an IP case in 3 hours and a CF case in 6 hours. -Refer to the scenario above. Suppose that the two lawyers' boss wants the total number of IP cases worked on by them to be equal the total number of CF cases worked on by them. So long as the total number of IP cases equals the total number of CF cases, their boss does not care which lawyer works on how many of which type of case. So Yasmin and Zeek decide to take advantage of their comparative advantages. How many IP and CF cases would they finish? (Hint: Assume that they can work on a fraction of a case.)

The following figure shows the demand curve, D, and supply curve, S, for milk in Cadbia. a) What is the consumer surplus, producer surplus, and total surplus if Cadbia does not engage in free trade? b) If the world price of milk is $4 per quart, will Cadbia import or export milk? c) What is the change in consumer surplus, producer surplus, and total surplus if Cadbia participates in free trade?

Which of the following statements correctly highlights a difference between countries with extractive economic institutions and countries with inclusive economic institutions?

According to Samuel Huntington, South Korea's economy experienced rapid economic growth because South Koreans valued thrift, investment, education, and discipline. In contrast, Ghana's economy did not grow as fast because the country had different social values. This argument claims that ________.

The following quote describes Chinaʹs effect on world labor markets. Chinaʹs emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in the US industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. (The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade by David H. Autor, David Born, and Gordon H. Hanson, Annual Review of Economics Vol.8:1-635, October 2016) -Refer to the scenario above. Which of the following statements stands in contrast to the impact of trade with China experienced by some U.S. workers described in this quote?