Exam 32: Comparative Advantage and the Open Economy

Dumping typically occurs as long as the foreign producer sells its output at a price

The argument that many critics of free trade have suggested that genetic engineering of plants and animals could lead to accidental production of new diseases is the

Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can produce a maximum of eight pies or two cakes in a day. Fred has an comparative advantage in the production of

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

The contention that domestic unions tend to want to restrict foreign competition with tariffs is

A legal restriction on the amount of a good that can be imported into a country is known as a

-Refer to the above figures. A tariff is placed on a foreign good. Which figure represents the situation in the domestic market for the foreign good?

Which of the following is counted as a benefit from international trade?

If protective import-restricting quota are imposed by a country, in the majority of cases that nation's consumers end up

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

Governments sometimes subsidize domestic industries. When this occurs,

Why is trade based on comparative advantage?

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

Suppose an industry receives protection from the government in the form of tariffs. A number of years later, it is observed that the quantity supplied by domestic firms had decreased and that the domestic price was substantially greater than the world price. We could conclude that

That each individual should engage in economic activities in which he or she is relatively more efficient is an application of the concept of

Which of the following is the situation in which firms outside a trade bloc shift the final assembling process of partially assembled products into a member nation of the bloc and then export the finished products to other nations within the bloc?

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

The infant industry argument has a normative economic basis because

A VRA is an example of

One way tariffs differ from quotas is that