Exam 7: Comparative Advantage and the Gains From International Trade

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called absolute advantage.

Many proponents of globalization claim "Trade is a win-win situation for all countries that participate." This statement is

Under autarky, consumer surplus is represented by the area

A consequence of increasing marginal costs of producing digital music players in Japan is

Figure 7.3 Assume that the Canadian government limits the import of peanuts. -Refer to Figure 7.3.What is the area of domestic producer surplus after the imposition of a quota?

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 revenue collected by the government equals the area

In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.One reasons for this is

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

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.Without the tariff in place, Canadians produce

Which of the following statements is true?

Which of the following statements is true?

Economists believe the most persuasive argument for protectionism is to protect infant industries.But the argument has a drawback.What is this drawback?

Figure 7.1 Figure 7.1 shows Canadian demand and supply for leather footwear. -Refer to Figure 7.1.Under autarky, the deadweight loss is

Figure 7.3 Assume that the Canadian government limits the import of peanuts. -Refer to Figure 7.3.What is the area of domestic producer surplus without a quota?

The selling of a product for a price below its cost of production is called

Figure 7.3 Assume that the Canadian government limits the import of peanuts. -Refer to Figure 7.3.Without the quota, the domestic price of peanuts equals the world price which is $2.00 per kilogram.What is the quantity of peanuts supplied by domestic producers in the absence of a quota?

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

The process of countries becoming more open to foreign trade and investment is known as

Distinguish between a voluntary export restraint and a quota.

In the U.S.steel market, a "Buy American" provision in the 2009 stimulus package would