Exam 9: Comparative Advantage and the Gains From International Trade

Bryce and Tina are artisans who produce homemade candles and soap. Table 9-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 9-3. Select the statement that accurately interprets the data in the table.

Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-6. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats will Denmark gain compared to the "without trade" numbers?

What is a tariff?

When Roxanne, a U.S. citizen, purchases a designer dress from Saks Fifth Avenue that was made in Milan, the purchase is

Suppose the U.S. government imposes a $0.50 per pound tariff on sugar imports. Figure 9-4 shows the demand and supply curves for sugar and the impact of this tariff. -Use Figure 9-4 to answer questions a-i. a. Following the imposition of the tariff, what is the price that domestic consumers must now pay and what is the quantity purchased? b. Calculate the value of consumer surplus with the tariff in place. c. What is the quantity supplied by domestic sugar producers with the tariff in place? d. Calculate the value of producer surplus received by U.S. sugar producers with the tariff in place. e. What is the quantity of sugar imported with the tariff in place? f. What is the amount of tariff revenue collected by the government? g. The tariff has reduced consumer surplus. Calculate the loss in consumer surplus due to the tariff. h. What portion of the consumer surplus loss is redistributed to domestic producers? To the government? i. Calculate the deadweight loss due to the tariff.

Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-6. Which country has an absolute advantage in producing clocks?

Which of the following statements is true?

Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-6. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Belize gain compared to the "without trade" numbers?

Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-6. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats will Belize gain compared to the "without trade" numbers?

Bragabong currently both produces and imports almonds. The government of Bragabong decides to restrict international trade in almonds by imposing a quota that allows imports of only 10 million kilos each year. Figure 9-5 shows the estimated demand and supply curves for almonds in Bragabong and the results of imposing the quota. -Use Figure 9-5 to answer questions a-j. a. If there is no quota what is the domestic price of almonds and what is the quantity of almonds demanded by consumers? b. If there is no quota how many kilos of almonds would domestic producers supply and what quantity would be imported? c. If there is no quota what is the dollar value of consumer surplus? d. If there is no quota what is the dollar value of producer surplus received by producers in Bragabong? e. If there is no quota what is the revenue received by foreign producers who supply almonds to Bragabong? f. With a quota in place what is the price that consumers of Bragabong must now pay and what is the quantity demanded? g. With a quota in place what is the dollar value of consumer surplus? Are consumers better off? h. With a quota in place what is the dollar value of producer surplus received by producers in Bragabong? Are domestic producers better off? i. Calculate the revenue to foreign producers who are granted permission to sell in Bragabong after the imposition of the quota. j. Calculate the deadweight loss as a result of the quota.

Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-6. What is the opportunity cost to produce 1 hat in Belize?

While attending the World Economic Forum in Davos, Switzerland in January 2020, President Trump threatened to impose tariffs on European automobiles if he could not negotiate a free trade deal with the European Union (EU), sparking backlash from EU officials and company executives. Trump has credited tariffs with helping to work out better trade deals with China, Mexico, and Canada, and believes the same can happen with the EU. Although not specifying a timeline for the possible auto tariffs, Trump did announce that he had reached a deal with French President Emmanuel Macron to delay a digital services tax against U.S. tech companies until the end of 2020 after threatening a 100% tariff on French wine. Source: Jacob Pramuk, " Trump says he is serious about slapping tariffs on European cars if he cannot strike a trade deal," cnbc.com, January 21, 2020. -Refer to the Article Summary. All else equal, if the Trump administration decides to implement a tariff on European automobiles, the price of imported automobiles in the United States will ________ and the quantity of imported automobiles demanded in the United States will ________.

Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-6. With trade, what is the total gain in clock production?

Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 9-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 9-6. Which country has a comparative advantage in producing clocks?

The term used by economists to describe a situation in which one country raises tariffs and other countries retaliate by raising tariffs on the first country's exports is

Which of the following is the best example of a quota?

The largest exporter in the world is

Table 9-4 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand. -Refer to Table 9-4. Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand.

By 2018, the U.S. trade deficit with China

Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day. -Refer to Table 9-2. Select the statement that accurately interprets the data in the table.