Exam 18: Comparative Advantage and the Open Economy

Absolute advantage is

A legal limit on the amount of sugar imported into the United States is

Benefits of free trade include all of the following EXCEPT

An official agreement with another country to restrict the quantity of its exports to the U.S. is

In the long run, imports are paid for by

The World Trade Organization

-Use the above table. Assuming constant opportunity costs, a comparative advantage in producing wine is possessed by

Suppose Ethan and Ava work in a farm that grows apples and oranges of the same size. In one hour, Ethan can pick 8 pounds of apples or 1 pound of oranges. Ava can pick 6 pounds of apples or 1 pound of oranges. It can be concluded that

The organization that settles trade disputes between countries is the

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

-Use the above table. Assuming constant opportunity costs, if Argentina and France specialize based on comparative advantage, then they will trade if the rate of exchange

The effect of an import quota is

A difference between a quota and a tariff is that

A government-imposed restriction on the quantity of a good that can be imported is

If Kami can produce 40 tablets or 30 cellphones during a month's time, while Sally can produce 10 tablets or 20 cellphones, then it is correct to state that

The importance of international trade in the U.S. economy

Trade restrictions tend to make domestic products

Goods that are produced in other countries and then sold domestically are called

-Refer to the above table. If opportunity costs are constant, each nation produces only the one good for which it has a comparative advantage, and trade can occur between the two countries

During the 1960s, U.S. steel firms argued they needed tariff protection because Germany and Japan were using new mills to make steel since their old mills were destroyed in World War II. Essentially, this argument is a form of the