Exam 7: Comparative Advantage and the Gains From International Trade

If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada, which of the following would explain this pattern of trade?

What is autarky?

Table 7.1 Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 7.1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 7.1.Select the statement that accurately interprets the data in the table.

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

Examples of ________ show how trade between two countries can make each better off.

The ratio at which a country can trade its exports for imports from other countries is called

Which of the following statements about the importance of trade to the Canadian economy is true?

Early international trade in Canada involved

Selling a product at a price below its cost is known as dumping.

In the 1970s and 1980s, North America lost its comparative advantage in consumer electronics goods to Japan.What factor was most responsible for the development of Japan's comparative advantage in consumer electronics goods?

Figure 7.2 Suppose the Canadian government imposes a $0.40 per pound tariff on rice imports. Figure 7.2 shows the impact of this tariff. -Refer to Figure 7.2.The tariff causes domestic consumption of rice

Assume that China has a comparative advantage in producing corn and exports corn to Japan.We can conclude that

Which of the following is not an example of a trade restriction?

In 2012 ________ of Magna International sales were outside Canada.

________ raised average tariff rates by over 50 percent in the United States in 1930.

Figure 7.3 Assume that the Canadian government limits the import of peanuts. -Refer to Figure 7.3.What is the area that represents the deadweight loss as a result of the quota?

Magna International's sales are larger outside Canada than inside Canada.

One of the main sources of comparative advantage is internal economies.

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why, then, do some people support protectionism?

Figure 7.1 Figure 7.1 shows Canadian demand and supply for leather footwear. -Refer to Figure 7.1.Under autarky, the consumer surplus is ________ and the producer surplus is ________.