Exam 18: Comparative Advantage and the Open Economy

For the infant-industry argument for tariffs to be appropriate, it is necessary that

Discuss the relationship between world trade and world Gross Domestic Product (GDP)since the early 1950s.

According to international trade theory

Protection of a new industry until it becomes strong enough to compete is called

Since the 1930s, overall tariff rates in the United States have

A voluntary import expansion involves a

Which of the following are regulations that nations in regional trade blocs establish to delineate product categories eligible for trading preferences?

Trade diversion results in

During the Great Depression, many industrial countries tried protecting domestic jobs by raising tariffs. Economic theory would suggest that the result would be

A government-imposed restriction on the quantity of a specific good that another country is allowed to sell in the U.S. is

Which of the following is NOT an argument against free trade?

Dumping is

-Use the above table. Assuming constant opportunity costs, the opportunity cost of producing a gallon of wine in Argentina is

Consider a world of two countries facing opportunity costs and producing only wheat and cloth. In one hour, residents of Country A can produce a maximum of either 1 unit of wheat or 0.5 unit of cloth, whereas residents of Country B can produce a maximum of either 0.3 unit of wheat or 0.4 unit of cloth. Country B should export

International trade is based on the existence of

Which of the following is NOT a benefit of international trade?

The contention that tariffs should be imposed to protect from import competition an industry that is trying to get started is

Some nations avoid the effects of trade deflection in a trade bloc by enforcing

The most important international trade organization is

-Refer to the above table. If opportunity costs are constant, the two countries will gain from trade at a rate of exchange of