Exam 7: Comparative Advantage and the Gains From International Trade

Table 7-5 Table 7-5 shows the output per week for pens and pencils by Tran and Farah. -Refer to Table 7-5.Fill in the following table with the opportunity costs of producing bows and arrows for Tran and Farah.

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 increase in domestic producer surplus as a result of the tariff is equal to

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

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 the deadweight loss as a result of the quota?

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 the market price be?

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts.Table 7-6 shows the production and consumption quantities without trade,and the production numbers with trade. -Refer to Table 7-6.Which country has a comparative advantage in producing swords?

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts.Table 7-6 shows 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 70 belts are traded,how many belts will Morocco gain compared to the "without trade" numbers?

Your roommate Hansen argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States.Hansen

Protectionism is the use of ________ to protect domestic firms from foreign competition.

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts.Table 7-6 shows 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 70 belts are traded,how many belts will Estonia consume?

Article Summary Roberto Azevedo, director-general of the World Trade Organization (WTO), reported that global trade growth estimates will be lowered for 2013 and 2014 because of increasing global protectionism. The current protectionism is based primarily in regulations rather than the more common tariffs and subsidies. Since 2008, almost 700 new trade restrictions have materialized — over 150 of those in 2012 alone — with Russia being singled out as one of the primary offenders. Source: Kiran Moodley, "WTO warns of trade slowdown due to protectionism," CNBC, September 6, 2013. -Refer to the Article Summary.The protectionism being granted to Russian firms is likely to cause

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.With the tariff in place,the United States consumes

Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade.These examples are misleading because

a.Distinguish between a tariff and a quota. b.In what ways are tariffs and quotas similar? c.In what ways are tariffs and quotas different? d.Why might a foreign producer prefer a quota rather than a tariff?

Many economists ________ protectionism because it ________ consumers and ________ jobs in domestic industries that use protected products.

Which of the following is the best example of a tariff?

All of the following are sources of comparative advantage except

Imports are goods and services bought domestically

Today,________ of Goodyear's tire sales are in the North America.

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.With a quota in place,what is the quantity consumed in the domestic market and what portion of this is supplied by imports?