Exam 7: Comparative Advantage and the Gains From International Trade

U)S.firms that sell products in foreign markets protested the "Buy American" provision in the 2009 stimulus bill,arguing that if the United States restricted imports from foreign firms,

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?

Protectionism

Absolute advantage is

Under trade agreements signed with other countries,the United States is allowed to impose tariffs on imports if foreign firms are selling products in the United States at below their production cost.This is exactly what occurred when the United States raised the tariff on wire hangers imported from China.This tariff

Figure 9-1 Figure 9-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 9-1.Under autarky,the consumer surplus is ________ and the producer surplus is ________.

An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called

Disagreements about whether the U.S.government should regulate international trade

Wall Street,in the borough of Manhattan in New York City,is the heart of the U.S.financial system,where banks,brokerage houses,other financial firms,and the New York Stock Exchange are all located.What is the reason for New York City's comparative advantage in the financial market?

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

The main purpose of most tariffs and quotas is to

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

Trade between countries that is without restrictions is called

Caterpillar's sales were severely affected by the decline in the U.S.housing market that began in 2006.Sales in the United States declined by ________ between 2006 and 2008,and export sales ________ during the same time period.

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 revenue to foreign producers who are granted permission to sell in the U.S.market when there is a quota?

Which of the following describes the infant industry argument for protectionism?

The World Trade Organization (WTO)promotes foreign trade and investment,or globalization.In recent years opposition to globalization has led to violent protests at meetings of the WTO.One reason for these anti-globalization protests is

Caterpillar's sales are now greater outside the United States than inside the United States.

Table 9-2 Output Per Hour of Work Table 9-2 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand. -Refer to Table 9-2.Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand.

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.If the tariff was replaced by a quota which limited rice imports to 16 million pounds,the amount of revenue received by rice importers would equal