Exam 19: Comparative Advantage and the Gains From International Trade

One of the main sources of comparative advantage is internal economies.

What is an 'open economy'?

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 hats will Belize consume?

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers _________.

Which of the following statements is used to justify protectionism?

What are domestically produced goods and services sold to other countries?

Japan has developed a comparative advantage in designing and producing automobiles.The source of its comparative advantage in these products is __________.

Why do firms offshore?

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 clocks is _________.

What is dumping? Who benefits and who loses from dumping?

Figure 19.1 Suppose the government imposes a $0.50 per metric tariff on sugar imports. Figure 13-1 shows the demand and supply curves for sugar and the impact of this tariff. -Use Figure 19.1 to answer questions a-i. a.Following the imposition of the tariff,what is the price that domestic consumers must now pay and what is the quantity purchased? b.Calculate the value of consumer surplus with the tariff in place. c.What is the quantity supplied by domestic sugar producers with the tariff in place? d.Calculate the value of producer surplus received by Australian sugar producers with the tariff in place. e.What is the quantity of sugar imported with the tariff in place? f.What is the amount of tariff revenue collected by the government? g.The tariff has reduced consumer surplus.Calculate the loss in consumer surplus due to the tariff. h.What portion of the consumer surplus loss is redistributed to domestic producers? To the government? i.Calculate the deadweight loss due to the tariff.

What is a numerical limit imposed by a government on the quantity of a good that can be imported into the country?

Examples of ________ show how trade between two countries can make each better off.

What do economists call a situation where a country does not engage in international trade?

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.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many hats will Belize gain compared to the 'without trade' numbers?

What do economists call the amount of imports that can be purchased per unit of exports?

What does it mean for a country to have an absolute advantage in producing a product?

Once a country has a comparative advantage in producing a product,it cannot lose that advantage.

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 clock in Belize?