Exam 19: Comparative Advantage and the Gains From International 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 Denmark gain compared to the 'without trade' numbers?

In the real world we don't observe countries completely specialising in the production of goods for which they have a comparative advantage.One reasons for this is _________.

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.The country which has an absolute advantage in producing hats is __________.

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

Which of the following is true about a quota?

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.Prior to trade,what was the opportunity cost to produce one hat in Denmark?

Measuring the impact of a quota or tariff on the economy is an example of ________.Stating that a quota or tariff should be eliminated is an example of ________.

A tariff is a tax imposed by a government on _________.

The World Trade Organisation (WTO)promotes foreign trade and investment,or globalisation.In recent years opposition to globalisation has led to violent protests at meetings of the WTO.One reason for these anti-globalisation protests is _________.

Table 19.1 Bathing Grooming Linda 60 20 Sandy 50 25 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 19.1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. -Refer to Table 19.1.Select the statement that accurately interprets the data in the table.

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.The country which has a comparative advantage in producing hats is __________.

Free trade refers to trade between countries without government restrictions.

Twenty-seven countries in Europe have formed the European Union (EU).After the EU was formed,it __________.

The Australian economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas.

Jobs lost to foreign trade are generally easy to identify,but jobs created by foreign trade are generally less easy to identify.

Goods and services bought domestically but produced in other countries are referred to as _________.

One reason a country does not specialise completely in production is that not all goods and services are traded internationally.

Why do domestic firms offshore production processes?

Assume that China has a comparative advantage in producing corn and exports corn to Japan.We can conclude that __________.

Table 19.4 Output per Hour of Work Handbags Jackets Cambodia 15 3 Thailand 24 6 Table 19.4 shows the output per hour of work for handbags and jackets in Cambodia and in Thailand. -Refer to Table 19.4.Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand. Handbags Jackets Cambodia Thailand