Exam 7: Comparative Advantage and the Gains From International Trade

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.What is the value of consumer surplus after the imposition of the quota?

If a country has a comparative advantage in producing a product,it must also have an absolute advantage in producing that product.

Which of the following is common to both tariffs and quotas?

Autarky is a situation in which a country

In general,the costs tariffs and quotas impose on consumers are

When Tesla,a U.S.company,purchases Italian-made Pirelli tires for its automobiles,the purchase is

The United States has developed a comparative advantage in digital computers,airliners and many prescription drugs.The source of its comparative advantage in these products is

The quota on imported sugar costs U.S.consumers more than $2 billion annually and protects very few jobs.Why does Congress maintain a sugar quota that protects only a few thousand workers while forcing millions of people to pay higher prices for sugar products?

Which of the following statements is false?

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.

Free trade refers to trade between countries

One reason a country does not specialize completely in production is that production of most goods involves increasing opportunity costs.

Figure 7-2 Suppose the U.S.government imposes a $0.75 per pound tariff on coffee imports.Figure 7-2 shows the impact of this tariff. -Refer to Figure 7-2.The tariff causes domestic consumption of coffee

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

Pakistan has developed a comparative advantage in the production of clothing.The source of its comparative advantage in these products is

Over the past several decades there has been a rapid growth in international trade.This growth has been due to all except one of the following factors.Which factor has not contributed to the growth of international trade?

Protection in the form of tariffs create winners and losers.Winners include ________ and losers include ________.

Which of the following is the best example of a voluntary export restraint?

________ is the ability to produce more of a good or service than competitors when using the same amount of resources.

A tariff