Exam 19: Comparative Advantage and the Gains From International Trade

Table 19.3 Candles Soap Bryce 150 450 Tina 200 450 Bryce and Tina are artisans who produce homemade candles and soap. Table 19.3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 19.3.Select the statement that accurately interprets the data in the table.

In 2009,Australia accounted for what proportion of world merchandise trade?

Table 19.6 Production and Consumption Production Without Trade with Trade Clerks Hats Clerks Hats Denmark 900 150 1200 0 Belize 150 100 0 400 Denmark and Belize can produce both clocks and hats. Table 19.6 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19.6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Belize gain compared to the 'without trade' numbers?

If Estonia has an absolute advantage in the production of two goods compared to Norway,Estonia cannot benefit from trade with Norway.

Many economists criticise protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

What is absolute advantage?

Economists believe the most persuasive argument for protectionism is to protect infant industries.But the argument has a drawback.What is this drawback?

Table 19.5 Baws Arrows Ahmet 20 80 MyLinh 25 75 Table 19.5 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 19.5. a.Which person has an absolute advantage in the production of bows? Arrows? b.Which person has a comparative advantage in the production of bows? c.Which person has a comparative advantage in the production of arrows?

Which of the following is true about a tariff?

If a country has a comparative advantage in producing a product,it may not have an absolute advantage in producing that product.

Protectionism __________.

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.

The first example used to explain comparative advantage used two countries (England and Portugal)and two goods (wine and cloth)to show that __________.

Countries that engage in trade will tend to specialise in the production of goods and services in which they have ________ and will ________ these goods and services.

Which of the following statements is true?

Table 19.6 Production and Consumption Production Without Trade with Trade Clerks Hats Clerks Hats Denmark 900 150 1200 0 Belize 150 100 0 400 Denmark and Belize can produce both clocks and hats. Table 19.6 shows the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19.6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Belize consume?

What term refers to reductions in a firm's costs that result from an increase in the size of an industry?

Many people assume that if child workers in developing countries weren't working in factories,they would be in school.In fact,children in developing countries _________.

Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because _________.

a.What is the World Trade Organisation? b.When was it established? c.How many countries are members of the World Trade Organisation?