Exam 7: Comparative Advantage and the Gains From International Trade

Table 7-6 Output per hour Production and Production of work Consumption without Trade with Trade Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 7-6.What is the opportunity cost to produce 1 belt in Morocco?

Table 7-6 Output per hour Production and Production of work Consumption without Trade with Trade Estonia and Morocco can produce both swords and belts.Each country has a total of 40 available labor hours for the production of swords and belts.Table 7-6 shows the output per hour of work,the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 7-6.If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded,how many swords will Morocco consume?

Trade restrictions are often motivated by a desire to save domestic jobs threatened by competition from imports.Which of the following counter-arguments is made by economists who oppose trade restrictions?

The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Suppose the government allows imports of leather footwear into the United States.What will be the quantity of imports?

In 1995,the General Agreement on Tariffs and Trade (GATT),which was established in 1948,was replaced by the World Trade Organization (WTO).Why did members of the GATT push for the establishment of the WTO?

A consequence of increasing marginal costs of producing laptop computers in the United States is

Members of Congress promising to support each other's legislation is known as

Dumping refers to

Which of the following statements about the importance of trade to the U.S.economy is false?

Figure 7-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 7-3 illustrates the impact of the quota. -Refer to Figure 7-3.If there was no quota,how many pounds of peanuts would be imported?

Table 7-4 Output Per Hour of Work Table 7-4 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada. -Refer to Table 7-4. a.Which country has an absolute advantage in the production of both light bulbs and flash drives? b.Which country has a comparative advantage in the production of light bulbs? c.Which country has a comparative advantage in the production of flash drives?

Table 7-3 Mateo and Celeste produce custom saddles and spurs.Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. -Refer to Table 7-3.Select the statement that accurately interprets the data in the table.

Figure 7-1 Figure 7-1 shows the U.S.demand and supply for leather footwear. -Refer to Figure 7-1.Under autarky,the producer surplus is area

In the 1980s,Japan agreed to limit the quantity of automobiles it would export to the United States.Why did the Japanese government agree to this trade restriction?

Table 7-1 Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food.Rob and Bill spent one day each fishing and picking berries.The table lists the pounds of output Rob and Bill produced. -Refer to Table 7-1.Use the table above to select the statement that accurately interprets the data in the table.

Explain why international trade is less important to the United States than it is to many other countries.

Domestically produced goods and services sold to other countries are referred to as

In 1930,the U.S.government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff.In response to this tariff,other countries ________ and international trade ________.

One of the main sources of comparative advantage is natural resources.