Exam 9: Comparative Advantage and the Gains From International Trade

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area that represents the deadweight loss as a result of the quota?

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. -Refer to Figure 9-3.What is the area of consumer surplus after the imposition of the quota?

As a percentage of GDP, exports are greater than imports for which of the following countries?

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

What is the difference between imports and exports?

One reason for the success that firms have in getting the government to erect and maintain barriers to foreign competition is members of Congress who engage in ________, where members in districts with protected industries agree to trade votes on issues that concern other members in order to uphold tariffs.

A tariff

Table 9-6 Output per hour Production and Production of work Consumption without Trade with Trade 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 consume?

Figure 9-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. -Refer to Figure 9-2.With the tariff in place, the United States

Table 9-6 Output per hour Production and Production of work Consumption without Trade with Trade 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?

The United States has developed a comparative advantage in film production due to the film industry being long-established in southern California, and lower costs result from the size of the industry in the area.This source of comparative advantage is referred to as

The U.S.economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

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.

Which of the following statements is true?

Table 9-6 Output per hour Production and Production of work Consumption without Trade with Trade 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 first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that

Table 9-6 Output per hour Production and Production of work Consumption without Trade with Trade 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.All of the following are terms of trade that could possibly benefit both countries except

NAFTA refers to a 1994 agreement that eliminated most tariffs among which countries?

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

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